You and the attorney use the time during your bankruptcy consultation to discuss your bankruptcy and non-bankruptcy options and assess whether or not filing a bankruptcy is in your best interest. Because the initial bankruptcy consultation is free, you are under no obligation.
When you come to our office for your bankruptcy consultation, it is helpful if you can bring the following information and/or documents with you; however, it is not required.There are five common reasons why people file bankruptcy. While not every person will fall into one of these five categories, these are the most common:
#1: Loss of income – Whether you lose your job or your hours are reduced, any time your income is unexpectedly reduced you may have a situation in which you may become behind on your bills. Most individuals have budgets that are set up based on what they earn each month; therefore, any drop in income can result in a financial crisis.
#2: Medical debt – Even with great health insurance, unexpected medical costs are impossible to control. Many of our clients have experienced a medical emergency that made them unable to pay their medical bills, plus their standard living expenses.
#3: Failed business – Even though the economy improved and continues to recover, many business owners are unable to weather the economy. Whatever the reason may be for the business failure, when a business owner is forced to close a business, he or she is liable for any debts that they personally guaranteed or co-signed for the business. A bankruptcy case can relieve them of this liability.
#4: Divorce – Divorce and bankruptcy often go hand in hand. Disputes over property, debts and other issues can become very expensive. Sometimes a spouse is left with a massive amount of debt after a divorce. In some cases, filing bankruptcy is a good solution to the debt problems caused by a divorce.
#5: Poor financial decisions – In some cases, it is a simple case of unfortunate financial decisions. At some point, we all make poor financial decisions. However, the bankruptcy court doesn’t ask you why you are filing bankruptcy; it is just there to help you out of trouble.
Some types of debt that seem to be more common than others include credit card debt, student loans, medical bills, car loans, mortgages, equity lines, payday loans, personal finance loans, past due utilities, business debts, taxes and domestic support.
While most debts are dischargeable in bankruptcy, there are a few you will not be able to erase through a bankruptcy filing. During your bankruptcy consultation, you’ll discuss your debts and your attorney will advise you of any non-dischargeable debts that you may owe.
Your attorney will discuss your various options to achieve debt freedom during your bankruptcy consultation. This may include a debt consolidation plan, filing Chapter 7, or filing Chapter 13 bankruptcy. If you choose to file a bankruptcy case, you will meet with one of our professional staff members to sign the forms and review information that you will need to complete your bankruptcy schedules. It is our job to help and support you through each step of the bankruptcy process; this is why we schedule a second appointment where you’ll work with one of our staff members to complete your forms.
On your second appointment, our staff member will go over each page of your bankruptcy schedules to ensure that every question is answered and that all information is correct and accurate. Your attorney will then review and sign the forms with you before our staff files the bankruptcy petition with the court. Your bankruptcy hearing will be scheduled in about 4 to 5 weeks after your petition is filed.
If you file a Chapter 7, the first hearing is probably the only hearing you will attend, and your case will be closed in about four months. If you filed a Chapter 13 case, you will have a second hearing to confirm your plan. You will continue making your monthly payment to the Chapter 13 trustee until all payments have been made, at which point your case will be closed. At the end of your bankruptcy case, you will receive a discharge and will no longer owe any of the dischargeable debts included in your bankruptcy.
For a more overview of the initial bankruptcy consultation, download our free eBook, What You Can Expect During a Bankruptcy Consultation.