The facts are that bankruptcy courts in Southern Illinois and Missouri are a distinct breed of federal court that enjoys jurisdiction over all bankruptcy matters. Almost all proceedings in such cases go before a bankruptcy judge for adjudication and disposition. The precise manner in which a case proceeds through the court will depend on a number of factors including the type of bankruptcy filed, the number of creditors involved and whether final discharge is being contested by an interested party. However, there are several stages and events common to the experience of most debtors in bankruptcy court.
The following is a description of what a filer can likely expect to encounter in either a Chapter 7 liquidation case or a Chapter 13 reorganization case.
Petition For Bankruptcy
Following a preliminary consultation with a bankruptcy attorney, the debtor’s petition will be filed. Upon completion of this step, the Bankruptcy Code’s automatic stay goes into effect, forbidding creditors from continuing collection activity against the debtor. The prohibition on continued contact applies to all creditors, including those pursuing home foreclosures, collections litigation, wage garnishment and the like. From that moment on, all outstanding debts must be handled through the bankruptcy court. Violations by creditors of the automatic stay are taken quite seriously, and a skilled bankruptcy attorney can make certain that all such offenses are brought to the court’s attention.
Once the initial petition is filed in a Chapter 7 case, a trustee will be assigned to oversee the matter and ensure that creditors are treated fairly throughout the administration of the bankruptcy estate. Chapter 13 cases are handled by a standing trustee in their particular jurisdiction. All debtors will be required to submit documentation to the trustee that may include bank statements, tax returns and other relevant financial information
341 Meeting of Creditors
In the majority of consumer bankruptcies, the only actual appearance the debtor must make is at the so-called “341 meeting” No judge is present at this event. The trustee oversees this proceeding during which the creditors affected by the bankruptcy filing are given an opportunity to question the debtor about his or her assets and obligations.
Generally speaking, most creditors do not appear at this proceeding. However, the trustee will ask the debtor a series of questions under oath to verify the debtor’s understanding of the bankruptcy process and the truthfulness of all written representations they have made in the case. It is recommended that the debtor’s bankruptcy attorney accompany them to this meeting in order to assist with any necessary clarifications or answer questions that may arise.
Before a final discharge can be considered by the Court, debtors are required to provide proof that they have successfully completed the Credit Counseling course and the Financial Management course. These requirements were instituted as part of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act.
The Credit Counseling course is a prerequisite to filing the initial petition. The second course must be completed during the pendency of the case in order to receive a discharge of debts.
Final Steps
The final hurdle for Chapter 7 filers to clear is for the 60 days following the 341 meeting to expire. This is the period during which creditors have an opportunity to pursue adversary proceedings registering an objection to discharge of the debt they are owed. After the 60 days have passed without incident, the court is free to order a discharge of all debts included in the case.
Chapter 13 cases involve reorganization and repayment of a portion of outstanding debts, making the road to discharge is a bit more complicated than in Chapter 7 liquidation cases. With the help of a bankruptcy attorney, debtors must formulate a repayment plan and have it approved by the Court. Such plans typically last between three and five years. If all payments are timely made pursuant to the approved plan, discharge of remaining debt amounts will then be granted.
The process of filing bankruptcy is something that can cause a sense of dread and anxiety for many. However, consumer bankruptcies offer debtors an invaluable opportunity to get a fresh start and place themselves on the road to a brighter financial future. Seeking the assistance of a skilled Southern Illinois/Missouri bankruptcy attorney is a critical step in ensuring the proper, legal discharge of debts that have become too burdensome to manage. By making the decision to seize control of the situation and begin anew, true financial recovery can be within reach.
Important Disclaimer: The information discussed above and throughout this website should not be relied upon to make any decisions without first speaking to a bankruptcy attorney. There are many intricate rules of law governing bankruptcy with many exceptions to the general rules that could change the advice given by an attorney based on the differing facts in each person’s special set of circumstances. THEREFORE, it is important to discuss any information contained in this website with one of our attorneys before taking any action or refraining from taking any action.
