A Step-by-Step Guide to Filing for Bankruptcy

If you’ve decided to file for bankruptcy, you’re not alone. In June 2017 the annual bankruptcy filings came to 796,037. With mounting medical bills, credit card balances, and other debt more Americans are turning to Chapter 7 or Chapter 13 to provide them with relief from impossible financial situations. To let you know what to expect, we are providing you with a step-by-step guide to filing for bankruptcy in Oklahoma.

  1. Prepare your financial data

When you are filing for bankruptcy, you need to be able to verify your financial information. Collect all documents that confirm your income, debts, assets, and monthly household expenses.

  1.  Obtain Credit Counseling

You must undergo credit counseling within 180 days before filing your petition. The procedure typically lasts no more than two hours and can be done over the phone or online. Afterward, you will receive a certificate of completion that must be filed with the bankruptcy petition.

  1. Hire a Bankruptcy Attorney

Although there’s nothing to stop you from filing for bankruptcy on your own, it’s not recommended. U.S. bankruptcy laws can be difficult to navigate without qualified legal assistance. Your attorney will go over your financial situation, help you determine which bankruptcy type is appropriate, and prepare the petition for you.

4a. Take the Means Test (for Chapter 7)

If you plan to file for Chapter 7, you will have to take the Means Test, which compares your average monthly income to the median income for an equally-sized household in Oklahoma. If you make less, you automatically qualify. If you make more, you may still qualify, but only after a series of calculations are done to determine whether you have the financial means to repay some of your debts in a Chapter 13 repayment plan.

4b. Propose a debt repayment plan (for Chapter 13)

If you are filing for Chapter 13, you will need to design and propose a plan to repay some or all of your debts. Your attorney will work with you to put together a plan based on how much debt you have and how much money you have left over after basic living expenses are met.

  1. Filing the bankruptcy petition and documentation

Your attorney will submit your petition to the local bankruptcy court. You must also pay a filing fee unless you filed a motion to waive the fee or applied to pay it in installments. Once the filing is complete, your bankruptcy estate is created and you receive a case number.

At this point, you are now protected by the automatic stay and all collection efforts against you must cease. If you filed for Chapter 13 you must begin making payments to the bankruptcy trustee within 30 days.

  1. Meeting of Creditors

Your creditors will be notified that you have filed for bankruptcy and invited to attend a 341 meeting, otherwise known as the meeting of creditors. You will have to provide information about your finances under oath and answer any questions the bankruptcy trustee or creditors may have.

  1. Confirmation of Admissibility

If you filed for Chapter 7, a bankruptcy court will review your petition and all financial information and decide whether you are eligible. If it approves, you relinquish control of your property to the bankruptcy court and a trustee will be assigned to administer your case. Their responsibilities include liquidating your nonexempt assets and distributing the proceeds to your creditors. If you filed for Chapter 13 and your repayment plan is confirmed at a post-341 hearing, the trustee will start dispersing your monthly payments to your creditors.

In general, a Chapter 7 bankruptcy lasts from three to six months while Chapter 13 has a three- to five-year timeline. Before you can be discharged, you must take a financial counseling program within 45 days of the 341 hearing.  If everything goes well, you are discharged after fulfilling the terms of your bankruptcy and are free to rebuild financially.

If you have questions about filing for bankruptcy in Oklahoma, contact the Law Offices of B. David Sisson for the experienced and compassionate legal guidance you need to put your financial difficulties behind you and move forward.

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