You don’t want to file bankruptcy. I get that. But if you are going to file, you want your bankruptcy to be successful. Right?
Often when I meet with people who are considering filing for bankruptcy they will ask me what the chances are that their bankruptcy will be successful at eliminating their debts. The answer in almost all cases is – pretty darn good.
The goal of your bankruptcy is obviously to deal with your debt problem. In chapter 7 bankruptcy pretty much all of your unsecured (i.e., credit card debt, medical bills) will be eliminated/discharged through the bankruptcy process. As long as you provide all of the information and documentation that is required by the bankruptcy court then you will likely receive your discharge and the debts will be eliminated. So why wouldn’t your case be successful? Here are 3 reasons why you could run into trouble:
1. Failing to Disclose Information
What it all boils down to is this: if you provide the information that is requested, jump through the hoops that the law has in place, and generally comply with any additional requests from the bankruptcy court or trustee you will be successful in eliminating your debts through bankruptcy. However, if you think you can outsmart the system and hold back on either information or documents you are setting yourself up for trouble. If you fail to cooperate during your bankruptcy case you could see your discharge either not entered or revoked. Rule of thumb, follow the rules and you will be fine.
2. Defrauding Your Creditors
This is one that you and your bankruptcy lawyer will likely know is coming before your case is even filed. Basically, if you incurred debts by committing fraud there is a good possibility that particular debt will not go away. However, it is important to understand that when we are talking fraud, we are talking Bernie Madoff-type fraud. Creditors will often throw fraud allegations around pretty loosely while in bankruptcy, but most often what they believe is fraud simply isn’t. It is not fraud to agree to pay someone and then come upon hard times and then not pay them – no matter what your creditors might say.
3. Failing to Show
In bankruptcy, simply showing up is a big part of the battle. After your bankruptcy case has been filed you will be required to attend the Meeting of Creditors. This is usually a pretty straightforward meeting with me, you, and your bankruptcy trustee. In most cases it literally lasts about 5 minutes. The most common thing I hear from clients after the Meeting of Creditors is “boy, that wasn’t near as bad as I thought it was going to be.”
That being said, the quickest way to deep-six your bankruptcy is not showing up. In Arizona the bankruptcy trustees are pretty inflexible when it comes to re-scheduling your Meeting of Creditors. However, you will have at least 30 days of prior notice so you can plan ahead and get time off.
When it comes to chapter 7 bankruptcy here in Arizona, well over 90% of bankruptcy cases are discharged successfully. And the great news is, it isn’t that difficult to be a success story. Follow a few simple rules, trust in your bankruptcy lawyer, and you will be on your way to a fresh start!