What Is the Filing Process for Chapter 7 and Chapter 13?
Bankruptcy is a legal proceeding that allows a debtor to get out of excessive debt and gain a fresh start financially. Bankruptcy is governed by federal law. Indiana law determines only what assets a debtor may keep upon the filing of his or her bankruptcy petition. There are three types of bankruptcy; however, one is generally for businesses only. The two main types for individuals are Chapter 7 and Chapter 13, which are described below.
The process of filing bankruptcy is a simple one. After we have prepared your petition for bankruptcy, we file it with the clerk of the bankruptcy court in the Southern District of Indiana. The court then notifies your creditors of your bankruptcy filing within approximately two weeks. However, you may notify creditors of your filing earlier if necessary to stop creditor harassment. Remember, once creditors learn of your bankruptcy, they can take no further action to collect their debt.
About three weeks following the filing of your petition, we will receive a notice of the first (and typically only) meeting of creditors. You must appear at this hearing; otherwise, your bankruptcy may be dismissed. If you cannot attend on the date and time specified, you should contact us as soon as possible so that we may request a continuance. At the hearing, a bankruptcy trustee will ask you general questions concerning your assets and other information contained in your petition. Review your schedules in advance so that you are prepared and can justify the information in your petition. Although the trustee conducts the hearing, any creditors that are present may also question you. (Often, secured creditors will be present to discuss whether you wish to surrender the secured property or “reaffirm,” meaning you are looking to pledge yourself back to that creditor, continue to pay them as you always have and reassume your personal liability on the debt). Most first meetings for simple personal bankruptcies are straightforward and last only a few minutes.