A Brief Explanation of the Bankruptcy Process

Graduating with a juris doctor from Rutgers School of Law-Camden, where he participated in a voter’s rights project, Adam Rosengard recently cofounded Rosengard & Moles, LLP. Along with his partner, Adam Rosengard practices in several areas, including criminal defense, family law, and bankruptcy cases.

What is involved in declaring bankruptcy? The process begins with a consultation in which the attorney will discuss finances and possible debt relief choices, with bankruptcy serving as one debt relief option. If bankruptcy is determined as the most appropriate route, the attorney will help determine whether to pursue an elimination of debts (Chapter 7) or a reorganization of debts (Chapter 13). After explaining his or her fees, the attorney will begin case preparation, including taking calls from creditors.

The bulk of the casework consists of writing and filing the bankruptcy petition, which can run as long as 30 to 60 pages. The lawyer will make sure his or her client has the chance to check the petition for accuracy.

Once the petition has been filed with the bankruptcy court, the filer is protected by an automatic stay, an injunction that requires collection attempts and related creditor activities to stop.

The person filing for bankruptcy must attend a 341 hearing in which he or she will testify to the accuracy of the petition. Creditors may attend the meetings, but rarely do. A person filing for bankruptcy must also complete credit counseling and debtor education briefings.

Before the court makes its decision, the attorney must file other motions, depending on the case’s jurisdiction. In Chapter 7, the attorney must indicate which collateralized assets, such as a house or car(s), his or her client wishes to keep. In most cases of Chapter 13, the attorney will file other documents in the event the court wishes to dismiss the case or if creditors try to prevent the automatic stay.

Once the case has been discharged, none of the creditors may attempt to collect the debts listed in the agreement.

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