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One does not need to make payments from the day one after filing for bankruptcy. However, there are certain debts which cannot escape from; for instance child alimony.
To file for a bankruptcy one needs to undergo a credit counseling course either in person, online or through phone. This is because, when one files for bankruptcy, one’s property and income that one has till date becomes a subject of claim by the creditors and one has to be able to organize his finances in such a way so that creditors are paid. The counseling also helps in ensuring that you do not land into the same mess in future.
Once a person decides to file for bankruptcy, it is important to consult an experience lawyer. At times, a fee is also required to be paid. Then the lawyer prepares the paperwork including the description of the property that one owns, the property to exempt, the name and address of the creditors, how much you owe them, current income and expense statement and also a description of what one intends to do with the collateral property. One has the option of protecting property by making it exempted. If the whole property gets protected, the debtor will not lose any property.
All the information must be true and approved by the court. A certain fee needs to be paid to the court. This fee changes periodically and can be paid together or in installments. Once the bankruptcy is filed, the court informs the creditors that the debtor has filed for bankruptcy and then sets a time, date and place for a hearing. The debtor must attend this hearing and answer all the queries posed by the court as well as the creditors. After seven days of the hearing, a copy of the recent tax return should be provided to the court. The court appoints a trustee, who is a representative of the creditor, who checks that all the forms are signed. It is his duty to sign and sell the non-exempt property and to distribute any proceeds from the sale to the creditors. There is another counseling course which needs to be taken after 45 days.
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