The Bankruptcy Process
Finding an Attorney to Represent You
When searching for an attorney to represent you, do your research. Find an experienced attorney that is willing to sit down and listen to you, one who is willing to spend the time it takes to gain an understanding of your specific circumstances and is willing to answer your questions about any part of the process or procedure. At the Rosenthal Law Group, P.A. we pride ourselves on the level to which we understand our client’s situations and needs. We believe that this allows us to better represent you, because we have a deeper understanding of you and your goals. We will guide you through the process and work hard to secure the best outcome possible.
The 2005 Bankruptcy Act requires that anyone filing for bankruptcy on or after October 17, 2005, to attend credit counseling within the six month period prior to filing bankruptcy. It also requires the completion of a financial management or debtor education course. This second course must be completed after the filing of the bankruptcy, but before the discharge of debt is entered and the case is closed
The Means Test
The Means Test is designed to determine your eligibility for Chapter 7 bankruptcy filing. The bankruptcy court will compare your average income for the past six (6) months to the median income for other Florida households of same size. If your income is below the median, then you, in almost all cases, automatically qualify for chapter 7. If your income is above the median then you may not qualify, but can still file for chapter 13. For a more in-depth explanation of the means test, click here
Writing the Petition
In order to begin the bankruptcy process you will need to make itemized lists and collect the following documentation:
- Any and all current income sources (Pay Stubs for the past six (6) months)
- Any major financial transactions for the two year period preceding the filing
- All monthly living expenses
- Any debts you may have (both secured and unsecured)
- Any property (not just real estate…this applies to any property)
- You will need your tax returns for the previous two years
- Bank Statements for the past 90 days
- Titles to your Car(s)
- Deeds to any real estate
- Any documents for outstanding loans you may have
We prefer to work directly with you and review your financial circumstances detail, rather than simply send you home with a pile of paperwork to fill out. The bankruptcy court and your creditors will uncover all of this information through their own sources, so, in order to avoid delays and restarts of the proceedings, it is critical that we are thorough from the beginning. As experienced bankruptcy attorneys, we can help ensure that all of the necessary paperwork is properly completed before it is submitted to the court.
Filing the Petition
Once all of the relevant information has been gathered, we will help you determine which property is exempt, based on the list of Florida exemptions, from seizure. We will then file the appropriate forms with the Florida district bankruptcy court. These are collectively referred to as the schedules. Once the petition has been filed with the court your creditors will be notified and will begin preparing their case to having certain debts exempted, or removed from the petition. They will then formally petition the court to remove the debts. We will respond to any motions and hearings and argue to include as much of your debt as the courts will allow. This part of the process normally takes from four to six months.
If you are filing a Chapter 13 bankruptcy, a proposed repayment plan will also be submitted. Secured debt and priority claims (such as back child support, taxes, etc…) must be paid in full, however, unsecured debt (credit cards, medical bills, personal loans, etc…) can often be paid off for as little as zero to 20 cents on the dollar.
After the petition has been filed with the bankruptcy court, an automatic stay goes into effect immediately. Creditors can no longer contact you directly or reclaim any of your property without the courts approval. Any foreclosure proceedings will immediately stop.
If you filed Chapter 13, you must begin making your plan payments at this point in the process. Your plan payments should go to the Chapter 13 Trustee assigned to your case, pursuant to the Court’s order and how your plan is formed.
Upon filing, any of your debts or property not covered by your Florida exemptions will be placed under the legal control of the court and a trustee will be appointed. The trustee’s job is to ensure that your creditors are paid as much as possible. The trustee will review your paperwork, including any assets still in your possession and any exemptions you are claiming. The trustee has the power to challenge any part of your petition.
If you file for Chapter 7 bankruptcy, the trustee will determine you eligibility and confirm that all documents filed with the court are complete and accurate. The trustee will investigate your finances and work to discover any funds that might be used to pay off your creditors. Under Chapter 7, the trustee will manage the sale of any nonexempt assets and use the funds to repay some portion of your debt.
If you file for Chapter 13 bankruptcy, the development of your repayment plan will be overseen by the trustee. It is the trustee’s job to ensure that any plan is reasonable and fair. The trustee will also coordinate, as well as document, all payments to your creditors.
The 341 Hearing
The 341 meetings are scheduled by the Bankruptcy Court and usually held 25 to 45 days after the date the bankruptcy is filed. This meeting will be held by your trustee and can be attended by your creditors; you are obligated to attend this meeting. Usually, you will meet with your trustee only once, typically at the meeting of creditors. After this initial meeting all communications with the trustee will be managed by and through your lawyer. This proceeding is referred to as the 341 Meeting, named for the corresponding section of the bankruptcy code and typically lasts less than ten minutes from the time your case is called up before the Trustee for questioning.
Although it is uncommon for your Creditors to attend a Chapter 7 bankruptcy meeting, one or two may attend if there is any question as to the legitimacy of your filing. Any objections are usually resolved through negotiation between the debtor and the creditor (or rather their respective council). If for any reason compromise simply cannot be reached, the judge will intervene at that point and make a decision.
If you filed for Chapter 7 and have any non-exempt assets, you will be required to turn the property over (or its fair market value in cash) to the trustee after the meeting. The debtor’s right to discharge a debt can be challenged by either the Trustees or any of the creditors for up to 60 days. After the 60 day period, provided there were no challenges, the Court will notify you within three to six months that your dischargeable debts have been discharged. And at that point your bankruptcy is should be complete.
If you filed a Chapter 13 plan you will need to attend a hearing before a bankruptcy judge who will either accept or refuse the repayment plan. If your plan is accepted and you complete it, at the end of your term any remaining balance on the dischargeable debts you owe will be eliminated.