Filing for personal bankruptcy can be stressful for most people. Many families face irrational embarrassment and shame for going through a process created to protect working families. Nobody finds bankruptcy a pleasant topic or process. However, the end goal is to get your debt under control by discharging unsecured debt either through a Chapter 7 liquidation bankruptcy or a Chapter 13 repayment plan. Although all debtors have the same goal of discharge at the end of their case, avoiding the pitfalls that can allow your case to become dismissed is essential to ensure you get the results you want from your bankruptcy.
Serve all the creditors in a timely fashion
As soon as a debtor files for bankruptcy, the debtor or their attorney must notify all of their creditors of the bankruptcy. Timely and accurate notifications to the creditors are a legal requirement upon filing your bankruptcy petition. Each creditor needs the opportunity to dispute the bankruptcy petition if they find any discrepancies or fraudulent information within the bankruptcy petition. A debtor who fails to notify all the creditors of their bankruptcy risks the possibility of having their case dismissed.
Ensure you attend the 341A Meeting of Creditors
A critical step in the bankruptcy process is the 341A Meeting of Creditors. This meeting allows creditors to question the debtor about their finances and the bankruptcy petition. Creditor attendance is optional, but every debtor must be present during the 341A hearing. The court determines the hearing time and date. In the case of a couple filing a joint bankruptcy, both debtors must be in attendance. Debtors with conflicting work schedules must make arrangements to attend regardless of personal conflicts. The appointed trustee will allow the rescheduling of the 341A hearing if the debtor misses the initially scheduled meeting. However, the bankruptcy case will be dismissed if the debtor or debtors are not present for the second appointed hearing for any reason. Preparing adequately and attending this meeting is non-negotiable for a successful bankruptcy process.
Comply with Procedural Rules for the appointed trustee
The respective court appoints a trustee to the bankruptcy case at the time of filing. An experienced bankruptcy attorney has extensive experience with each trustee and knows the idiosyncrasies of their process. Some trustees want all the debtors’ identification and financial information sent by mail to their office a week before the 341A meeting. Other trustees require uploading documents to a website portal of their choosing. Although bankruptcy law is uniform for all debtors, trustees may focus on different aspects of the petition. Understanding where the trustee will focus and following the trustees procedural rules is imperative to ensure the case will move through the system smoothly without threat of dismissal.
File Your Petition Correctly
For those considering a pro se bankruptcy filing, it’s crucial to understand the complexity of correctly declaring exemptions, especially the homestead exemption which varies by county. The US trustee will check the schedule C of the debtors petition carefully to ensure they used the both the correct exemptions and the if the amounts used on their homestead exemptions are correct. The homestead exemption amounts which change annually can be particularily difficult for pro se debtors to determine as the median household sales prices are not listed anywhere in the industry. If the US trustee finds any reason to dismiss a case based on the incorrect usage of exemptions they will surely do so.
Pay your Chapter 13 Payment Plan on time
Adhering to the payment schedule is critical in a Chapter 13 bankruptcy. Your first plan payment is due 10 days before the 341A Meeting of Creditors, with the second payment due 10 days before the confirmation hearing. Missing more than two payments can result in case dismissal. By the time of the confirmation hearing, all payments must be current, emphasizing the importance of financial organization and discipline throughout this period.
File for Discharge After Completing Chapter 13 Payments
Upon completing your Chapter 13 payment plan, it’s not over until you officially apply for discharge. This step requires completing a debtor education course, further proving your commitment to managing your finances responsibly post-bankruptcy. Submitting your application for discharge is the final step in closing your Chapter 13 bankruptcy case successfully. Failure to submit the Chapter 13 application for discharge will result in a dismissal of your case.
Navigating bankruptcy requires careful attention to detail and adherence to the law’s requirements. By understanding the common pitfalls and diligently following the necessary steps, you can avoid the risk of dismissal and move towards a financially stable future. Remember, consulting with a bankruptcy attorney can provide invaluable guidance and increase the likelihood of a favorable outcome in your bankruptcy case.