Bankruptcy Process: You are in Their World Now

by John Skiba

Bankruptcy is a powerful financial tool.  Think about it…it can eliminate years of debts, interest, penalties, all within the few months that it takes to process the typical chapter 7 bankruptcy.  The elimination of your debts comes through the Discharge Order that is issued by the judge in your case.  In order to obtain a discharge of your debts you have to jump through all the necessary hoops and play by the the rules as outlined in the Bankruptcy Code.  If you do that, you will be successful.

If you don’t, you could open yourself up to some real harm.  In many – if not most- other areas of the law there is a lot of back and forth and negotiation by the parties to reach a resolution.  In bankruptcy, while there is some gray area, generally it is more of a rule-based system that requires strict adherence.  What it comes down to is by filing for bankruptcy you will get the benefit of the powerful bankruptcy discharge, in return, the bankruptcy expects you to follow the rules.

Here are a couple of examples:

Disclosure of Assets and Debts

This is a big one.  You will be required to disclose all debts and all of your assets.  All of them. Period.  I help clients through this process and we are as thorough as possible.  Don’t ask your attorney if you can conceal assets or the question “how will the court know?”  Everything must be disclosed.  If you conceal an asset it could end up costing you your discharge or even worse could be prosecuted as a felony.

Letting your bankruptcy lawyer know what your debts and assets are upfront will allow you and your attorney to put together a solid plan that will help your bankruptcy proceed as smoothly as possible.

 Cooperation with the Bankruptcy Trustee

In all chapter 7 and chapter 13 bankruptcy cases a trustee will be assigned to review your bankruptcy documents and to administer your case.  As part of this process your trustee may request additional documents like tax returns or bank statements.  You must cooperate with the trustee and provide the requested documents.  On occasion there may be a request that is out of bounds, but that is why you hired a bankruptcy lawyer – to help you in processing these requests and understanding your rights.

In general though, you will be required to cooperate with the trustee.  Again, failing to do so will definitely cause you grief and in extreme cases could cost you your discharge.

Just because you are in bankruptcy does not mean that you don’t have any say or rights in the process but it is important to understand that there are laws and rules that you must comply with if you want to obtain a discharge of your debts.  The real value of hiring a bankruptcy lawyer is having someone there to guide you through this process and help you navigate the rules.

If you start the bankruptcy process with the understanding that there are rules and you will expected to play by these rules, your bankruptcy will proceed very smoothly.

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Written by:

John Skiba

Arizona Consumer Law Group, PLC on:

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