Filing for any type of bankruptcy protection may be a long and arduous procedure that could really tax an individual mentally and emotionally. There are many steps involved to make sure the proper steps have been followed to the letter so there are no errors made when it comes time for the court's final choice.
The first aspect of getting bankruptcy protection from the federal government is to go through a process called credit counseling whereby you learn about all of the stages that one must go through to file for bankruptcy. Credit counseling is also required because it's a learning experience in that the debtor receives the knowledge that they'll need to stop the need for bankruptcy filing any time in the future. Tis a good preventative size up that helps many people get out of debt and stay out of debt.
After counseling, the petition for bankruptcy should be filed and put on record with your local judicial system. When filing this petition, you will also be asked to provide a listing of all the financial belongings that you currently either own or are leasing. This includes your house, car, boat, motorcycle, or anything else of material value that the court should know about. The trustee that'll be assigned to your case will use this information to determine what possessions need to be liquidated in order for creditors to be paid the money that they are due.
The trustee being appointed to your situation is the next step in the procedure, as it's the trustee who'll handle all of the economic matters in the case and decide exactly how the cash should be allocated and where it's going to come from. They’re interested in getting you out of debt so that your new life may begin to take shape. The trustee will also request your latest tax return in order to see what choices are going to be available when it comes time to deal with the creditors.
The 341 meeting, or the lenders meeting, follows the court appointing a trustee to your specific situation. This is an important element in the proceedings because up to this point, the creditors have been unaware of your financial position. By laying everything out on the table, the trustee could show them precisely how much of the delinquency can be recovered and by what means.
After all of the financial information has been sent to all interested parties, a decision will come down concerning whether or not you're approved for Chapter 7 protection. If you're OK'd, the next step will be the trustee selling any non-exempt assets that you have in your possession. This will be the main source for cash that'll be repaid to the creditors. The trustee will handle all of the economic transactions between yourself and your creditors. After non-exempt property, any other items that have been bought using secured loans will be sold off for money to add to the bankruptcy fund. These items need to still have the loan be outstanding on them to be eligible for sale.
After a final hearing where you have learned that you are fully discharged of all of your responsibilities to your creditors, you're free to start your life over again without the concerns related to being consumed by your ever-present debt.
