If you plan to file for bankruptcy, take the time to learn about the bankruptcy process before you jump in. Start by reviewing the steps in a typical bankruptcy case for both Chapter 7 and Chapter 13. Then learn about important bankruptcy procedures, protections, and requirements, like the credit counseling requirement, the powerful automatic stay, the creditors' meeting, the Chapter 13 confirmation hearing, and the role of the bankruptcy trustee. You can also find information on converting from one chapter of bankruptcy to another, what happens if creditors challenge certain aspects of your bankruptcy, and more.
Your interaction with the court is fairly limited in a Chapter 7 bankruptcy. In fact, if you have a very straight-forward bankruptcy the odds are you will never have to meet the assigned judge. You always have to attend a Meeting of Creditors with counsel present before the bankruptcy trustee. The trustee makes certain your bankruptcy petition is correct and he or she collects and distributes non-exempt assets to your creditors. There is a lot of paperwork our firm will file on your behalf with the court. So while our involvement with the court is fairly intensive this will be handled by Mohave Law PLLC, while you focus on making money and continuing on with your daily affairs.
In most Chapter 7 bankruptcy cases a discharge will follow step 1 and the case will eventually be closed. In cases with more issues a creditor might object to their debt being discharged. That creditor will then file an objection to the discharge. If the creditor wins you will be forced to repay the obligation. If you commit some kind of fraud in your case the trustee can ask the court to make you repay all of your debts. Fraud would include providing false information within the content of your bankruptcy petition or by hiding assets which should have been included in the bankruptcy estate.
Step 3 could include adversary proceedings, but this is exceedingly rare. Common types of adversary proceedings would include fraudulent transfers, preferential transfers, lien stripping, dischargeability of a debt, sale of property jointly owned by the debtor and objection to a discharge.
A post bankruptcy proceeding could involve suing creditors who continue to try and collect even though your debt was discharged in the bankruptcy. Banks have so many different departments and accounts that the communication tends to be poor and we see more and more post bankruptcy litigation for violation of the bankruptcy laws.