The Bankruptcy Process: What To Expect

COPY OF YOUR BANKRUPTCY PETITION I will promptly e-mail you a copy of your bankruptcy petition. I suggest that you keep this document for at least 3 years, because it's possible that, long after your bankruptcy is completed, you will need to have proof that you filed it or that a creditor was listed in the petition.

WHEN WILL YOUR CASE BE FILED I will file your case within 30 days of it being completely ready, which means that your petition has been prepared, you have signed the signature page, I have the pre-bankruptcy counseling certificate and all other papers and information I have requested, and you have paid in full.

NOTICE OF FILING I will file your case online, and notify you promptly of your case number and your hearing date, which should be about 4 to 6 weeks later. About a week after your case is filed, the bankruptcy court will send a notice to each one of your creditors ordering them to stop all collection efforts against you.

2 ND REQUIRED BUDGET COUNSELING SESSION Do the 2nd counseling session soon after I notify you that I filed your case. Go to Access counseling online or by calling (800) 205-9297. Give Access the attorney code RED479SB. If you do the class online, their charge is $9, and if you do it on the phone, it's $15.

WHAT HAPPENS IF YOU DON'T DO 2 ND COUNSELING SESSION ON TIME I have to file the certificate showing you completed this counseling with the court no later than 60 days after your hearing. If the certificate is not filed by then, your case will be closed without a discharge, which means that you will still owe your creditors. If this happens, your case can be reopened with payment of a $260 filing fee and proof that you have finally completed the counseling. You will also have to hire an attorney to make a special court appearance in front of a bankruptcy judge to get approval, and this will cost you additional attorney's fees. Don't let this happen. Do the counseling session soon after the case is filed.

WHERE YOUR HEARING WILL BE If you live in Cook County, your hearing will be at the Federal Building, 219 S. Dearborn St., Room 800, Chicago, which is at the corner of Dearborn and Jackson Streets. The hearing will be on a weekday afternoon.

If you live in Will County, your hearing will be at the Kendall County Courthouse, 807 John St.,First Floor, Yorkville. The hearing will be on a weekday at 11 a.m., 12:15 p.m., or 1:30 p.m. You must be present at the hearing, and I or an associate attorney will be there to represent you. Bring your driver's license or other picture ID, and your social security card or an other card or document showing your name and social security no.

WHAT WILL HAPPEN AT THE HEARING First, relax. The hearing is likely to last only about 5 minutes, and it will be informal and reasonably stress-free. Have your ID and proof of social security number ready to show the hearing officer at the beginning of the hearing. You will be shown the signature page that you signed at my office, and you will be asked whether you signed it, and whether you listed all of your debts and everything that you own. You may also be asked whether there any changes which need to be made, whether I gave you a copy of the bankruptcy petition, and whether you read the bankruptcy information sheet that I gave you in the office. If you own real estate, look at your bankruptcy petition in Schedule A before you go to the hearing to see the market value we listed for it. You may be asked what the property is worth--you will probably want to say the same value it is listed for in the petition--and how you know this (such as by appraisal, a Realtor's market evaluation or your knowledge of what similar houses are selling for). Sometimes the hearing officer will also ask other questions about your financial situation.

DISCHARGE About 10 weeks after your hearing you can expect to receive your bankruptcy discharge in the mail from the bankruptcy court. The discharge means that you successfully completed your bankruptcy, and that your case has been closed. Be sure to keep your discharge order for at least 3 years.

CREDIT RECORD The fact that you have filed for bankruptcy will be noted on your credit record for 10 years. This does not mean that you will not be able to reestablish your credit for 10 years. In fact, most people are able to get credit within 2 to 3 years.

IF YOU WANT TO KEEP A CAR WHICH IS BEING FINANCED The finance company is likely to ask me to have you sign a reaffirmation agreement, which says that you will keep the car and make the payments. If you sign the agreement, you will be responsible to make the payments even after the bankruptcy is completed, so that if you ever stop making payments or the car is repossessed, the finance company will be able to demand payment from you for the balance due and even sue you in court just as if you had never filed for bankruptcy. But if you keep the car and make the payments without signing a reaffirmation, the finance company can never demand money from you-the only thing it can do is to take the car back if you don't pay.

Because most finance companies will permit you to keep your car and make the payments without signing a reaffirmation agreement, I recommend that you not sign one if this is the case. However, a few companies will require that you sign a reaffirmation if you want to keep your car, and will repossess it if you don't sign one, even if you are current with your payments. Another possible advantage to not signing a reaffirmation is this: If you owe more than the car is worth at the time you are ready to finance a new car, instead of trading it in, and having to borrow extra money because you are upside down on the trade-in, you can give the car back to the finance company even after the bankruptcy is over and not owe the company any more money. If you don't sign a reaffirmation, it's possible that the finance company will stop sending you monthly statements, and may stop reporting to the credit bureau that you have been making your payments, but you can make your payments without a statement, and if necessary show that you have been making the payments even if this doesn't show on your credit report.