The goal of every consumer bankruptcy case is to get a discharge. What is a bankruptcy discharge? A bankruptcy discharge means that you are relieved of your legal obligation to repay the debt. Until that point, you remain legally obligated for the underlying debt. To be sure, while you are in a bankruptcy case, the automatic stay provisions of the bankruptcy code prevent creditors from collecting from you, it is only the bankruptcy discharge that relieves you of the legal responsibility to pay the debt.
For many of our guests, it has been years since they could obtain financing or purchase a new vehicle or buy a new home. Maybe they have never purchased a new home and now being debt free, with the overall improvement to your credit, they now want to buy a new home. Whatever the reason, the common thread with everyone is they are anxious to get their life back and start fresh. The feeling of having the heavy weight of overwhelming debt lifted from your life is near miraculous really. For the first time in quite some time, our guests can breathe again, live again, and stop living in the past.
For chapter 7 bankruptcy debtors, they will get their discharge approximately 60 days after discharge. For chapter 13 debtors, they will get their discharge typically when the plan ends, at the end of 3-5 years. Regardless of when the discharge comes, it cannot come soon enough for most of our guests. The long wait to solve this debt problem had been painful. Like Judy who filed a chapter 7 with the Bankruptcy Attorneys in Roseville, MN said, “ thank you for making a difficult time in my life so easy.”
As stated previously a chapter 13 plan can be 3 years or 5 years. 3 years is the minimum and 5 years is the maximum. We cannot make the plan less than 3 years (unless you pay it in full within 3 years) and we cannot make the chapter 13 plan longer than 5 years. Every person’s plan is different. When a guest calls into ask when their plan ends our team will look at your last plan filed with the court and tell you how many months remain from that date. I can remember when I started college at St. Cloud State University. I thought, crap, 4 years is going to take forever. Actually, when you stop focusing on it, 4 years was a blur. I think the same holds true for chapter 13 clients. If you focus on the time, it will seem like an eternity. When you get on with living your life and focus less on the clock, the time flies by faster than you think!
When we file a chapter 13 bankruptcy, our guest is required to make a payment on the plan each month. This payment is due 30 days after the case is filed with the bankruptcy court or it is considered late. So, for example, if you file your bankruptcy case on March 10, your first payment is due to the chapter 13 trustee by April 10 and so on until the plan is completed. We hand out little booklets so our clients can write down when they make payments so they can easily keep track of the payments and how many have been made.
The 341 hearing typically takes place 4-6 weeks after you file the bankruptcy case. Whether you file a chapter 7 or a chapter 13 bankruptcy case, the items you bring to the 341 meeting are the same. First, you will need proof of your identification. This can take the form of a driver’s license, state issued ID, or a military ID. These items are government produced and will work. What will not work is a photograph of you taken by a friend or relative or a photo of you taken by an employer.
Second, you will need to show proof of your social security number. Any government produced document with your full social security number will work. For example, a social security card or a military ID or any other item produced by the government as long as it has your full social security number on it. In addition to anything produced by the government, items produced by your employer or employer’s accountant will work too. For example, a 1099, a w-2, etc will also work.
In advance of the hearing we send the trustee your most recent paystub and appropriate bank statements as well. That way, you don’t have to worry about bringing those to the hearing.
When our Roseville MN Bankruptcy Attorneys file cases for our clients, the court sends notice to the creditors that the bankruptcy case has been filed. These notices go out via US MAIL. Some creditors also get an electronic notice as well.
In 2016, I marvel at how fast creditors get notice of the bankruptcy case. It is really fast! However, some of the less sophisticated creditors take the notice by mail only. That takes some time. I always tell my clients, we have to give creditors one billing cycle to know we are here and a bankruptcy has been filed.
However, if you hear from creditors after one billing cycle, we tell our guests to let us know immediately. When we receive these collection letters from you or a billing statement, we send the creditor a letter advising them of your bankruptcy filing and to immediately cease collection activity. We also notify them about the provisions of section 362 of the bankruptcy code.
After receiving this letter, most creditors cease immediately. If they do not, we may have to consider suing the creditor for a violation of the automatic stay and asking for fees and costs. This is usually unnecessary. However, some creditors who are small and unsophisticated leave themselves exposed to lawsuits such as these because they are unwilling to stop collection activity. In those rare instances, bringing a stay violation is the appropriate remedy.
In this case you may need to call, stop in or mail us documentation to our Roseville MN Bankruptcy Law Firm at:
Kain & Scott, P.A.
2355 Fulham St #400
Roseville, MN 55113
612-843-0523
To learn more about Bankruptcy download our Free Debt Solutions 101 eBook.