Bankruptcy Process Overview
THE PROCESS, START-TO-FINISH
- Free 30 minute consultation.
- Take the online Credit Counseling Course, answer our questionnaire, and submit the documents we request.
- Review and sign your bankruptcy forms.
- Take the online Financial Management Course and gather a few additional documents.
- Attend a short video conference meeting. We will be there to help you through it.
- If you filed a Chapter 13 bankruptcy continue to make your plan payments. If you filed a Chapter 7 bankruptcy turn over all non-exempt property.
What is a ‘Means Test’?
It is a test designed by the federal government to balance the needs of consumers to purge crushing debt and the needs of the creditors to get paid for their services rendered. The Means Test was designed to identify those consumers that earn enough money to pay back some of their debts before receiving a Discharge. So, if your Household Income is above the Median Income and you have enough income to repay a portion of your debts, then you can file a Chapter 13 bankruptcy, but you are precluded from filing a Chapter 7 bankruptcy. If your debt is primarily business debt and in a few other limited situations, you are excluded from Means Test and you can generally choose what type of bankruptcy to file.
How is Household Income calculated in the Means Test?
Your annual household income is determined by adding all money received by the household from any source (except Social Security) during the six (6) complete months before bankruptcy is filed and multiplying that number by two (2).
How is Median Income calculated in the Means Test?
Median income is the income amount that if exceeded by your household precludes you from filing a Chapter 7 in most cases. Median Income is determined by the IRS which looks at incomes from all people residing in your state. This amount changes periodically, so for current calculations go to the U.S. Department of Justice’s website at justice.gov/ust/means-testing .
Can I pay my bankruptcy attorney fees after the bankruptcy is filed?
The answer depends on the type of bankruptcy one files. In a Chapter 7 we require payment in full before filing, unless it is a true emergency. The firms that allow clients to file Chapter 7 bankruptcy for little to no money down and payments due after filing should warn their clients that additional expedited time limits are placed upon the consumer in those cases and that problems are likely to arise that could have been corrected if discovered by the attorney before the bankruptcy filing. Also, if the consumer fails to comply with the added time restrictions their case will be automatically dismissed without a discharge. In a Chapter 13 bankruptcy a substantial portion of the fee is earned after filing bankruptcy resulting in the bifurcation of the attorney fees with part paid before filing and the other after filing by the bankruptcy trustee from a portion of the consumer’s plan payments.
How can I pay my fees?
We accept all forms of payment including credit card, debit card, certified checks, personal checks or check-by-phone. We can accept credit cards only from third parties such as parents or friends who are paying your bankruptcy fees. If you choose to pay with a debit card or if a third party pays with a credit card, we charge an additional 2% processing fee.
What is a 341 Meeting?
After you file Chapter 13 or Chapter 7 bankruptcy you are required to attend a meeting known as the 341 Meeting, We can arange for you to attend the meeting via video conferencing from the comfort of your home. Those attending the meeting with you include your attorney, and the Bankruptcy Trustee. Creditors may attend, but rarely do. The judge is not invoted and will not attend. The meeting takes about fifteen (15) minutes allowing the Bankruptcy Trustee to review your bankruptcy documents and ask questions. This is not like the court hearings you see on TV with attorneys yelling at witnesses. Everyone is respectful and understands your situation.
When will the creditors stop calling and sending me letters?
Once we receive the down payment of $500 you may direct all creditor communications to our office. Collection agencies must comply with your request but original creditors may defy this instruction. Once bankruptcy is filed the court will immediately order the creditors to stop collections.
Can I file bankruptcy if I filed previously?
In some case you may be precluded from filing a second bankruptcy within six months of the dismissal of a prior case. If a Chapter 7 bankruptcy is filed within one year of a previous bankruptcy you may not receive protection from creditors until discharge (about 90 days after filing). If you filed a previous bankruptcy and received a discharge a subsequent discharge may be withheld if the second case is filed too soon (look at file dates not discharge dates):• Eight (8) years for a Chapter 7 to Chapter 7;• Six (6) years for a Chapter 13 to Chapter 7;• Four (4) years for a Chapter 7 to Chapter 13;• Two (2) years for a Chapter 13 to Chapter 13.
Will I lose my tax refund?
In a Chapter 7 bankruptcy you will lose any unpaid tax refunds from years past and a portion of the current year’s tax refund. In a Chapter 13 bankruptcy generally all tax refunds received during the bankruptcy will be seized to pay creditors.
How long must I wait after bankruptcy to purchase a house or vehicle on credit?
There is no law that prevents you from receiving loans after bankruptcy. The choice is in the hands of the lender and you should speak to mortgage lenders or used car dealers before filing bankruptcy.
How long will the bankruptcy stay on my credit report?
Currently the law allows a bankruptcy to remain on a credit report for ten (10) years.
Does bankruptcy prevent creditors from reporting to the Credit Bureaus?
No, creditors can report pre-bankruptcy debts to the credit Bureaus as long as they indicate the debt is included in bankruptcy.
Must I have health insurance to file bankruptcy?
It is not an official requirement; however it is strongly encouraged by our office. Living without health insurance on yourself, your spouse or dependents is a huge financial risk and after filing bankruptcy you should avoid all financial risks until you are once again able to use bankruptcy as a safety net.
If I file bankruptcy must I disclose all my property?
YES! YES! And just to be clear, YES! You can get in a lot of trouble by hiding property in bankruptcy which can include fines and jail time. If my office learns of property you failed to report, we will first encourage you to sign an amended schedule to disclose the property and if you refuse we are ethically obligated to tell the bankruptcy court.
What happens if I forget to disclose some property in my bankruptcy forms?
If it was an oversight, there will not be a problem as long as we amend your forms to rectify the omission. However, you must try your best to remember and disclose all your property before filing.
Do I need to travel for any meetings or hearings in bankruptcy?
No. All meetings and communication with our office can all be done over the phone, email, texts, and regular mail. If you want to meet in person, we can schedule an appointment at either our Billings MT, Bozeman MT, or Powell WY offices. After filing bankruptcy you must attend one meeting, however you attend via video-conferencing from the comfort of your home or our office, you choose.
File Bankruptcy Without Leaving Home
You can now file bankruptcy without leaving home. Everything can be done using your phone or computer with video conferencing.
However, if you want to meet fact-to-face come on in to one of our three offices in Billings, Bozeman and Powell.