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The Initial Consultation
In the ideal situation, filing for bankruptcy will take as long as it takes to fully understand your financial situation and ultimate goals. To accomplish this, our bankruptcy attorneys will require a significant number of documents, statements, and supporting records to confirm your current economic state.
The first part of the bankruptcy process is the initial consultation with one of our experienced bankruptcy attorneys. During this discussion, you will be asked many questions regarding your debt, income, assets, and other factors that could impact your bankruptcy. For instance, our office will want to know if you paid back any relatives recently, made any large purchases, or transferred any property. The answers to these questions, and others, will determine how your bankruptcy will proceed.
Additionally, you will be given an overview of both Chapter 7 and Chapter 13 bankruptcies, so you understand the advantages and disadvantages of each. In some cases, a potential debtor will have the ability to choose which Chapter they wish to file. However, in most situations, the debtor’s circumstances will dictate which Chapter is appropriate.
Analyzing Finances and Debts
If you are calling a bankruptcy attorney, you have an idea of how your financial situation stands. Nonetheless, it is still important to review your finances with an expert. One of the requirements for filing for bankruptcy is completing a “credit counseling” course with a qualified counselor. If you have not done so before meeting with one of our bankruptcy attorneys, our office will provide a list of certified counselors. The counseling could take a couple of hours over the phone if you have all your necessary information. However, if you need to gather your financial information and see a counselor in person, this process could take a couple of weeks.
Once you have spoken with a counselor and determined that you wish to continue preparing to file for bankruptcy, our lawyers will evaluate your financial information as it relates to bankruptcy. This is a vital step because your assets, income, and debts will determine what Chapter you qualify for and which Chapter will be the most beneficial.
The timing for this depends on two important factors – how fast you can supply the necessary documents and how complicated your situation is. Our office will need bank statements, tax returns, pay stubs, an asset list, and a comprehensive overview of your monthly expenses. The list of required documents could increase substantially based on your circumstances. For example, if you are a small business owner or have several rental properties, you will have to provide a detailed business questionnaire, including a list of liabilities, assets, and accounts. Furthermore, our Folsom bankruptcy attorneys will need a profit and loss statement along with monthly operating reports.
Preparing the Petition, Bankruptcy Schedules, and Means Test
Once our office has received and reviewed all your documents and statements, the bankruptcy petition and schedules will be prepared. The time this takes and depends on the complexity of your case and whether you are filing for Chapter 7 or Chapter 13.
The first document our office will complete is your means test. This form is used to calculate your monthly disposable income and determine if you qualify for Chapter 7 or disposable income in Chapter 13. All household income from the previous six months and some qualified expenses are used to complete the calculation.
The bankruptcy schedules contain a comprehensive list of your real property, personal property, debt, creditors, household income, and monthly expenses. Also included in these documents is the statement of financial affairs, which lists income for the previous three years, payments to creditors, transferred property, and other information related to you and your business if you operate one.
If you are filing Chapter 13, our Chapter 13 bankruptcy attorneys will also prepare a bankruptcy plan based on the information we have. The plan will indicate your proposed monthly payment and the creditors that will be paid through your bankruptcy. During the course of your case, your creditors will file claims evidencing what you owe them. Once these are filed, your plan will likely have to be amended.
Before the petition, schedules, and other documents are filed, our office will carefully review them with you to ensure the information is true and accurate. You will have to sign each schedule to indicate that the information was based on the documents, information, and statements you provided.
Emergency Skeleton Petition
As you can see, there is a significant amount of preparation required before a bankruptcy is filed. Depending on the complexity of a case, this process could take days or weeks. However, there are circumstances when a bankruptcy must be filed quickly. If your home is scheduled for a sheriff’s sale in the morning, completing all the required schedules is almost impossible.
A debtor who must file immediately has the option of filing an emergency petition. In this case, only the petition, a list of creditors, proof of social security number, and a certificate of credit counseling is filed. You will have fourteen days to file the remaining required documents. While necessary, this process is not always advisable because your complete financial picture might not be fully evident. Nonetheless, if your back is against the wall, you should contact our experienced Orange County bankruptcy attorneys.
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