One of the first things those who are considering bankruptcy want to know is how the process of bankruptcy works. The purpose of this brief article is to review, in layman’s terms, the procedural aspects of a bankruptcy proceeding from the time one first meets with an attorney at Lincoln Law to the time his debts are discharged. My focus will be on Chapter 7 bankruptcy.
During the first phone call to our office, our receptionist schedules an initial consultation at no cost to the potential client. Upon arrival, the consumer fills out a brief form that one of our attorneys will review in order to better understand the potential client’s situation. If the potential client brings tax returns, paystubs, and a short list of debts owed, our analysis will be even better. The consultation with the attorney and staff seldom lasts more than 30 minutes, during which time the attorney will assess the situation, offer suggestions, recommend what he considers the best solution, and then quote any attorney and filing fees. If the consumer would like to go ahead and retain our services, he signs a retainer agreement and pays a nominal retainer fee. From that point on, the consumer becomes an official client of Lincoln Law.
Before leaving our office, we provide the client with various forms to fill out and a fairly extensive list of documents we will need returned. Also, our receptionist schedules a return appointment for about a week from the initial consultation. The client is told that Lincoln Law represents him and he may refer debt collectors and creditors to call Lincoln Law rather than continuing to harass the client.
At the return appointment, the client brings the forms and documents and meets with our paralegal who reviews the paperwork with the client and ensures that it is all complete. If everything is in order, our paralegal scans every document into our computer system and returns the originals to the client. The client may make a payment toward the balance. Finally, the receptionist sets up a third appointment, typically for several days later.
Between the second and third appointments, our attorneys assess all of the information the client has provided, apply the appropriate legal principles to the case, fill out the petition forms, and make sure everything is in order for filing. Then, at this third ‘signing’ appointment, the client reviews the petition, signs it, and remits any remaining fee balance. Shortly after the documents are signed, we file the petition with the court.
At this point, creditors are barred from contacting the client, harassing him, or otherwise attempting to collect on any debt. A waiting process begins during which we may make post-petition filings to respond to creditors, submitting necessary documents to the court and the trustee, and we generally keeping track of the case. About a month after filing, one of our attorneys accompanies the client to a ‘341’ meeting where the trustee, another attorney who represents the creditors collectively, asks certain questions about the case to make sure what has been submitted in the petition properly represents the client’s financial past, present, and future prospects. Happily, the meeting seldom lasts more than 3-5 minutes and the attorney is available to aid the client with answering questions.
Once the meeting is over, only one last waiting period of 60 days remains. Barring rare surprises, when the 60 days are up, the client’s debts are completely discharged and the case is over.
The entire process, then, lasts about 3-4 months and is relatively painless. Bankruptcy is an important legal source of financial relief for those who have been hit by pecuniary reverses, irrespective of personal fault. The process does require some work and financial commitment, but it is a small price to pay for a fresh start.
