Thank you for reading our bankruptcy filing guide. Our goal is to provide the most straightforward playbook to help everyone understand the bankruptcy process. First and foremost, it is more common than most people think. In an average year, approximately 70,000 chapter 13 bankruptcies are filed in the state of Florida. Many successful people including several former presidents have used bankruptcy to relieve financial pressure and get a fresh start. Anyone could have the same opportunity with the help of an experienced attorney.
We have broken this guide into several stages. Read on to learn exactly what to expect throughout each step of the process.
What to expect from an initial Bankruptcy consultation
For most people this is the scariest part, but it doesn’t have to be. Here’s what to expect from your initial consultation with a BankruptcyNow attorney. The initial consultation usually takes about 30 minutes and can be done without leaving your home by phone. Or, you can come meet with us in the office. During the initial consultation, the lawyer’s goal is to get a good understanding of the potential client’s financial situation.
Some common issues are:
- Job Loss
- Credit Card Debt
- IRS Issues / Back Taxes
- Wage Garnishments
- Creditor Phone Calls
After filing 1000s of bankruptcies over the years, our attorneys can quickly assess and recommend the best approach for your individual case. Depending on the circumstances, it could be Chapter 13, Chapter 7 or we might advise not to file for bankruptcy at all. Either way, after the consultation, if you decide bankruptcy is your best option; our attorney will provide a list of documents that must be collected in order to submit to the court appointed Trustee. The client is responsible for gathering these documents and filling out some simple paperwork post-consultation.
Paperwork Check List
- Drivers License or State Issued ID
- Security Card
- Registration- All automobile, boats, motorcycles etc.
- Debtor employed- 6 months’ paycheck stubs
- (6) Month bank statement (including all pages)
- (4) Years of tax returns
- Statement payoff on all mortgages, cars or any other lien (If applicable)
- Provide copy lease if Debtor is receiving rental income (If applicable)
- Social Security statement (If applicable)
- Provide copy of the declaration page of Debtor life insurance. (If applicable)
- Pension, retirement or 401k statement (If applicable)
- (For Miami-Dade / Monroe Countries) – A copy of any check in the last (6) months in excess of $999.00 with an explanation
- Breakdown of (6) months income
- (4) years of corporate income tax returns
- Profit and loss statement and balance sheet.
How do I choose Chapter 13 or Chapter 7?
An experienced bankruptcy attorney could help you quickly determine which type of filing is right for you. He/she will ask a series of questions to help you understand your options. For example, with a chapter 7, if you qualify, your case can be over in about 7 months from filing. Chapter 7 works best for those with few assets and minimal income. Chapter 13’s are more complicated, but are suited for clients that want to keep their property such as real estate, cars or other assets.
How much does it cost to get started?
Everyone should take advantage of the fact that the inital consultation is free. The actual attorney fees are determined by your financial situation and whether you choose to file a chapter 7 or a chapter 13. For chapter 13 filings, attorney’s fees are built into the repayment plan. There is an amount that will be due prior to filing the case, and the rest will be paid through the plan. Legal fees will be detmined during your consultation with attorney Michael Brooks. Most of the fees will be paid over your chapter 13 repayment period of 3-5 years. All fees are required to be disclosed by the attorney and approved by the court. For chapter 7 filings, all the fees are collected upfront because after the filing of the case, no fees for the filing of the bankruptcy can be owed to the lawyer. Attorney fees range but are affordable for everyone, especially when factoring in the amount of debt that will be wiped out.
The Chapter 7 Approach
The biggest difference between a chapter 7 bankruptcy and chapter 13 is that the 7 is finished faster, but it’s not always the best option for everyone. During pre-filing, our attorney will make sure all of your documents and paperwork are ready to submit to the court. Before filing, the client must take an online credit counseling course. The course takes about 20 minutes to complete.
Filed A Chapter 7 - Now What?
First, all credit cards that are active on the day of filing may be closed automatically by the bank regardless of whether any money is owed to them. However, there is a way to re-establish credit after the bankruptcy is filed. The attorney will explain this process in detail during the initial consultation. Approximately 4-6 weeks after the filing, there will be a hearing in which the client must attend either by phone (during COVID19) or in person. This is a very informal hearing which is before a court appointed Trustee, not a Judge. While waiting for this hearing to be scheduled, the Trustee will require bank statements received after the date of the filing of the bankruptcy. The court appointed trustee wants to see how much money was on deposit on the date of filing. At this time, all documents which the client has provided to the attorney will have been submitted to the chapter 7 Trustee prior to the initial hearing. After the case is filed but prior to the case being closed, a second credit counseling course must be completed. If this is neglected, it could be a costly mistake. This class takes about 2 hours to complete. Approximately 3 months after the hearing before the Chapter 7 Trustee, the client will receive a discharge. This means creditors can no longer try to collect on any discharged debt that was included in the bankruptcy.
Life After Chapter 7
Contrary to popular belief, a properly executed bankruptcy can result in fixing your poor credit rating. Some clients have reported over 740 credit scores after only 2 years! If you’re ready to take the next step, it would be our pleasure to help you find the right option for you. Schedule a free consultation by calling 954-859-6662 today!
The Easy Chapter 13 Approach
After deciding on chapter 13 and collecting all the necessary documents, our attorney will conduct a pre-filing review. At this time, we will make sure all of your documents and paperwork are ready to submit to the court. Similar to the chapter 7, before filing, the client must take an online credit counseling course. Once this is completed, the attorney can file the case.
What's Next After Filing Chapter 13?
Your attorney recommended Chapter 13, you gathered all the necessary documents and they were submitted. Now, the Trustee will require the next month’s bank statements received after the date of filing of the bankruptcy. They are looking for how much was on desposit in the bank account on the day of the filing. All credit cards that are active on the day of filing may be closed automatically by the bank regardless of whether any money is owed to them. However, there is a way to re-establish credit after the bankruptcy is filed. The attorney will explain this process in detail during the initial consultation. Usually within 6-8 weeks of filing, there will be a hearing which the client must attend either by phone (during COVID19) or in person. This hearing is a very informal hearing before a court appointed Trustee, not a Judge. There will be many other hearings which the client will not have to attend. Prior to the confirmation hearing, the Trustee may request additional documents necessary for the hearing and generally notifies the Attorney the day before. For this reason, we may have to ask for additional documents on short notice and it is the client’s responsiblity to get the documentation to the Attorney on time. In the event the Trustee does request additional information, our experienced lawyers know how to rush the process and deliver on behalf of the client. In many cases, the client will only need to go to court one time unless there is an Evidentiary Hearing scheduled for something special such as stripping a mortgage, valuing a car, etc. All other hearings will be attended by the attorney. The client’s first payment to the Trustee is due 30 days after the filing of the bankruptcy and every 30 days after that. Payments will usually come from client’s paycheck, but it takes approximately one month to get that set up. Therefore, the client is responsible for the first payment by Cashier’s Check or Money Order Only. In certain situations such as when the client is unable to have their employer make the payment for them, a Motion to waive the income deduction order may be filed, and the client will be required to personally make the payment every month.
Post Confirmation Chapter 13 Cases
Approximately 6 months to a year after the filing of the bankruptcy, the court will confirm the Chapter 13 repayment plan as long as the client is current with their payments to the Trustee. At that point, the Attorney will continue to monitor the case, collect tax returns every year and stay informed of any changes in the circumstances of the client. For example, if the Debtor has a personal injury suit after the case is filed, they must amend their schedules to add that claim or they waive their rights to make that claim. Also, if there is a significant reduction in income, the client may be able to reduce their plan repayment until their income increases. Alternatively, if the client’s income goes up significantly, the client may have to pay more money to the Trustee for the benefit of unsecured creditors. Any time after the case is filed but prior to the final payment due to the Trustee, a second credit counseling course that takes about 2 hours must be completed. If the course is not completed, the case will be closed without a discharge, and it will be as if the Debtor never filed for bankruptcy. This can be corrected, but will result in only more attorney fees and costs!