The process of filing for bankruptcy in Chattanooga can be complex, especially if you attempt to go through it without the assistance of a legal professional. There are multiple steps that a debtor must take during the filing process and after officially declaring bankruptcy. A bankruptcy lawyer could help you complete these steps effectively and allow you to regain control over your unmanageable debt.
Often, debtors delay seeing a lawyer when deciding whether or not to file for bankruptcy. This is a mistake that should be avoided, and people facing serious debt should enlist legal assistance before their situation progresses to the stage of eviction or a lawsuit. Even if a debtor does not want to file for bankruptcy right away, a qualified lawyer in the area could help prevent these negative outcomes from happening.
The least costly bankruptcy cases are those in which a debtor asks for legal help early enough for the lawyer to put an effective case together that a trustee can easily approve. When people wait to file, the cases can become more expensive and time-consuming.
The debtor should immediately start collecting copies of important documents like utility bills, credit card statements, bank statements, tax returns, payroll, and pay stubs. Bankruptcy attorneys often like to see documents stretching back three months. Additionally, if the debtor has refinanced their home or has an equity line of credit, a lawyer may want to see the actual contracts for those loans.
After a debtor files for bankruptcy, their local lawyer sends a copy of the complete filing to all the creditors listed on the schedule of creditors. The creditors are then notified that they can no longer contact the debtor in an attempt to collect the debt.
There will then be a meeting of the creditors between six weeks and three months after the initial filing. At this meeting, the bankruptcy trustee will question the debtor to ensure that they have made accurate statements. The creditors can then challenge their debt if they wish and come up with reasons the debt should not be discharged.
That meeting of the creditors could lead to an adversary proceeding, which is a separate case. It does not happen often in low- or no-asset cases. The more the debts are worth, the more likely the creditors are to challenge them. However, if the creditors continue to call or harass the debtor, they may be subject to serious penalties.
Typically, a no-asset Chapter 7 case goes to the judge after the meeting of creditors, and the judge signs the trustee-approved petition. This step can be between four and six months after the initial filing, depending on the schedule of the court.
This process changes if an adversary proceeding is initiated at the meeting of creditors. If that happens, it becomes a separate case and may take much longer.
If a debtor’s bankruptcy filing is denied, they can always file an appeal. They can try to get it changed at the trial level, and if that does not work, they could file in the appellate court.
The court rarely denies a petition unless there is something seriously wrong with the paperwork. It follows that appellate options are limited and rare.
It may be crucial for you to have legal representation as you go through a bankruptcy filing, especially if it results in an adversary proceeding where your petition may be challenged by creditors. A Chattanooga lawyer could help you navigate each stage of the filing process to get your bankruptcy petition approved. Call today to schedule a consultation and learn more about your options.