For individuals, there are two types of bankruptcy available: Chapter 7 and Chapter 13. Each type of bankruptcy has its own process, and knowing both state-specific laws and bankruptcy laws is essential. Consulting a bankruptcy lawyer will ensure that every law is satisfied and each procedure is followed.
Chapter 7 Bankruptcy
The process for filing Chapter 7 bankruptcy is as follows:
1. You will complete a bankruptcy petition and other documents, including bankruptcy schedules, and submit them to the courts.
2. 30-40 days after you file the necessary paperwork, there will be a hearing, called the First Meeting of Creditors. During the hearing, your trustee will ask you questions under oath. Creditors can ask you questions as well, if they want to.
3. After 60 days pass, the Court can issue your discharge. Typically, the court will issue the discharge 75-90 days after the First Meeting of The Creditors.
4. In order for a discharge to be granted, you must complete a financial management class with a U.S. Trustee-approved counselor.
5. After discharge, you can reestablish credit right away! If one does the right things after bankruptcy, they often can obtain a B+ to A- credit rating within 2 years after discharge.
6. Chapter 7 bankruptcy is sometimes known as liquidation bankruptcy. If any assets are “non-exempt”. They can be sold and the proceeds applied toward debts.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy will follow these general steps:
1. You will file a bankruptcy petition.
2. The court will issue an automatic stay that prevents creditors from taking further action against you or your assets and assign a case number and trustee to your case.
3. Within the 15 days after filing your petition:
- The court will send a Notice of Commencement of Case to you and the creditors informing all parties of the date, time, and locations of the creditors meeting and deadlines for claims or objections.
- Schedules that pertain to your debt, assets, income, and expenses must be filed. Other documents must be filed also.
- You must submit a plan of debt consolidation to the court.
4. In order for discharge to be granted, you must complete a U.S. Trustee-approved financial management class.
5. Chapter 13 bankruptcy is different from Chapter 7 in that it can allow the debtor to retain “non-exempt” assets and it establishes a 3-5 year debt repayment plan. It can also help a debtor get current on secured debts. If a debtor is behind on monthly car or mortgage payments, but wants to keep their car or home, Chapter 13 is a great way to go.
For bankruptcy help in Milwaukee, contact Sapinski Law S.C. at (262) 782-9400. Andrew Sapinski is an experienced bankruptcy attorney who can help you on the path toward financial freedom. Find out about your bankruptcy and non-bankruptcy solutions by meeting with Sapinski Law S.C.
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