Bankruptcy is a legal procedure that offers a fresh financial start for those overwhelmed by debt. While it does provide relief from many forms of debt, it’s not a process to be taken lightly. Individuals filing for bankruptcy must fulfill various obligations and responsibilities to ensure a successful bankruptcy proceeding.
These duties begin even before the bankruptcy case is officially filed. One primary responsibility is to provide complete and truthful information about their financial status. This comprehensive disclosure includes an accurate account of all their debts, assets, income and expenses.
Pre-filing credit counseling
One crucial responsibility for filers is to complete credit counseling from a government-approved organization within 180 days before filing. This requirement applies to both Chapter 7 and Chapter 13 bankruptcy cases. This counseling is to inform debtors about potential bankruptcy alternatives and ensure they comprehend the implications and process of bankruptcy.
Cooperation with the bankruptcy trustee
Once the bankruptcy process is underway, cooperation with the bankruptcy trustee becomes pivotal. This cooperation may involve providing additional financial documents, appearing at the meeting of creditors or answering queries related to their financial circumstances or assets.
Making timely plan payments in Chapter 13 bankruptcy
In cases of Chapter 13 bankruptcy, which includes a plan to repay debts over three to five years, one significant responsibility is making plan payments promptly. Any delay or default in these payments can risk the dismissal of the bankruptcy case.
Post-filing financial management course
Lastly, filers are required to attend a debtor education or financial management course after filing for bankruptcy. This course is designed to equip individuals with the skills to manage their finances effectively post-bankruptcy and prevent future financial distress.
Understanding exactly how bankruptcy will impact your life is crucial. Working with someone who understands your circumstances is beneficial in these cases.
