Bankruptcy can be a highly complex legal process. However, it can and will help you permanently resolve debts you can’t repay. Understanding the nuances of bankruptcy law typically requires a law degree and extensive experience. While it’s possible to file for bankruptcy without the help of an attorney, it’s certainly not recommended. The bankruptcy court will require you to provide information about all your finances, including income sources, debts, and living expenses. There will also be pre-bankruptcy filing and post-bankruptcy filing documentation requirements in addition to having to provide the bankruptcy fees. Behm Law Group, Ltd. attorneys will support and guide you through the entire process of filing your bankruptcy petition and they will work with you through the rest of the nuances of the bankruptcy code in Waseca, MN.
Bankruptcy Code
There are many terms outlined in the bankruptcy code that might be unfamiliar to someone who has never filed for bankruptcy relief. Some basic bankruptcy terms include:
Trustee:
The bankruptcy trustee is a court appointed official, who is usually an attorney, who oversees and administers your case. The trustee collects and examines your paperwork concerning your bank accounts, tax returns, etc. The trustee is a fiduciary for your creditors, particularly your unsecured creditors. The Chapter 7 trustee administers your bankruptcy estate and liquidates your non-exempt properties and distributes the resulting value to your creditors. A Chapter 13 trustee receives your monthly chapter 13 plan payments and divides the monthly payments up among your unsecured creditors. The Chapter 13 trustee also reviews your chapter 13 plan repayment proposal to ensure that the terms of your chapter 13 plan comply with the requirements of the bankruptcy code and are fair to your creditors.
Credit Counseling:
Credit counseling is a pre-bankruptcy requirement that must be done through a court-approved counseling agency within 180 days before the filing of your bankruptcy petition. The counseling will address the budget issues/problems that you have been experiencing and it will examine the reasons that forced you to file for bankruptcy relief.
341 Hearing:
The 341 hearing, also called the meeting of creditors, is an administrative hearing that is usually conducted thirty (30) days after a bankruptcy petition is filed. At the 341 hearing, you and your attorney meet with the trustee administering your bankruptcy case. The hearing usually lasts only ten (10) minutes or so and the trustee asks you various questions about your financial situation and about your bankruptcy petition to ensure that you have disclosed all your assets and creditors. You are sworn under other oath and you must answer the trustee’s questions truthfully. Your creditors may also attend the hearing and ask you various questions about your assets and liabilities. In most cases, however, no creditors attend the hearing and it is just you, your attorney and the trustee discussing your financial situation.
Secured Property:
Any debts tied to a property are considered secured. This typically includes home mortgages, car loans, financing on furniture and appliances, and mortgages on other real estate, such as business properties and rental properties.
Unsecured Property
: Debts that are not tied to property are considered unsecured. Most individuals have unsecured debts like credit cards, medical bills, personal loans, tax debts, student loans and more.
Means Test:
The Means Test is a mathematical formula that calculates your income-to-debt ratio. If this ratio is lower than the state median or average income for a similarly sized household, you can qualify for Chapter 7 bankruptcy. If it’s higher, you may have to file for Chapter 13 bankruptcy relief instead.
Automatic Stay:
When you file any type of bankruptcy petition, the automatic stay is immediately in effect. This stays most creditor collection activities while your case is being processed. After you file a bankruptcy case, creditors can’t continue collecting on debts that you owe and they can’t harass you with nasty telephone calls or abusive and threatening letters.
To learn more about bankruptcy terms to help you understand if you need to file for bankruptcy and to obtain more information about the bankruptcy code in Waseca, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today or stephen@mankatobankruptcy.com.
