The bankruptcy process helps an individual resolve his or her financial problems and pay back debts. Filing for bankruptcy may cover credit card debt, medical debt, and certain tax debt, among others. A bankruptcy attorney can help you understand how to file a bankruptcy petition and proceed with debt management when necessary.
Without sufficient knowledge and experience, bankruptcy laws may be difficult to understand. Note that there are different types of bankruptcy that one may choose from, depending on his or her particular circumstance. The most common bankruptcy filings, however, are under Chapter 7 (liquidation bankruptcy) and Chapter 13 (reorganization bankruptcy). Most bankrupt people who do not qualify to file Chapter 7 opt to file a Chapter 13 bankruptcy case (and instead reorganize their finances through a debt-settlement plan). In either case, consulting with a bankruptcy lawyer is necessary before filing.
Filing bankruptcy is not a one-person deal. While not a lot are familiar with the role of a trustee in bankruptcy proceedings, his or her responsibilities are crucial in your petition. This includes evaluating submitted paperwork for a bankruptcy filing and examining the proposed payment plan vis-a-vis bankruptcy law. A bankruptcy trustee also collects monthly payments to be distributed to one’s creditors.
- Review and evaluation of the proposed payment plan
A payment plan specifies how a debtor intends to repay debts that are owed to each creditor. One duty of the trustee is to ensure that the restructuring and the actual debt repayment plan is reasonable for both the debtor and the creditors. The trustee would review all the bankruptcy forms submitted by the filer. Since a bankruptcy petition contains details such as your monthly income, living expenses, assets, and debts, the bankruptcy trustee may have to obtain tax returns and bank statements.
- Arrange the meeting of creditors
A trustee shall conduct a meeting of creditors (which you are required to attend) within a month of filing a petition in bankruptcy. Under oath, debtors must answer questions about the bankruptcy information provided. Anticipate receiving questions regarding your assets and income. Your bankruptcy trustee may arrange another meeting if further paperwork is required.
- Oversee confirmation hearings
In some bankruptcy cases, you may be receiving an objection from court approval. Here you will be given a brief period to fix the issues and submit an opposition (in favor of the proposed payment plan) to the bankruptcy court. The trustee would supervise the confirmation hearing and evaluate if the proposal is practical and meets all conditions. The judge will then decide whether to accept or reject the proposal.
- Collection and management of the payment plan
Once the court approves the proposed plan, the trustee shall secure the funds for the creditors. A Bankruptcy Chapter 13 trustee shall proceed to allocate the payments to the creditors following the terms of the agreement. The process takes three to five years for bankruptcies filed under this chapter. The trustee shall continue to collect and pay all the creditors until the agreement is completed.
- Objection to inappropriate claims
A proof of claim must be provided by the creditor to the court within 70 days from your declaration of bankruptcy. This claim specifies the amount debtors owe, with all the supporting documents. The trustee shall evaluate the claims and object if there is any lack of evidence or if these are fraudulent.
Declaring bankruptcy under Chapter 13 (or wage earner’s scheme) allows an individual to pay off his or her debts over a set period, which will depend on your income and doable monthly payments. When you file for bankruptcy, you can secure your home and your properties. You can stop foreclosure and repossession while restructuring your finances. Additionally, through the trustee, there will be no interaction between a debtor and any lender. Because of this, harassment and wage garnishment from debt collectors may be avoided.
Rebuild your financial future and have a fresh start in life. Hire the best bankruptcy attorneys. Contact us at E. Orum Young Law for legal advice and assistance regarding bankruptcy proceedings.