May 7, 2013

Posted by in Uncategorized | Comments Off on The Bankruptcy Process

The Bankruptcy Process

For any person that is considering bankruptcy, taking a moment to understand the full bankruptcy process is always beneficial. It is beneficial on so many levels too. For one thing, a person will be under less stress because they know and understand what is going on. Another reason that understanding the bankruptcy process is beneficial is that it could actually help a person reduce their overall costs of bankruptcy when hiring an attorney for Bankruptcy in Reading PA.

Pre-Bankruptcy Discovery

The first thing to understand about the bankruptcy process is the pre-bankruptcy period. Typically this is a period that is about 180 days prior to actually filing for bankruptcy. During this time, a person who is seeking bankruptcy is required to go through pre-bankruptcy counseling. There is usually a small fee associated with hiring a pre-bankruptcy counselor, but it is certainly not that big of a fee.

During pre-bankruptcy counseling, a person’s financial situation is examined and discussed. Everything is evaluated including all current assets and liabilities as well as potential alternatives. A counselor will always try to find alternatives to bankruptcy as that will always be the better alternative from a personal perspective. In addition to that, a counselor can also help a person develop a personal budget plan, which is essential to have during bankruptcy hearings.

Filing for Bankruptcy

Once a person completes the pre-bankruptcy process the next thing that happens is the actual filing of bankruptcy. Now for a personal bankruptcy there are two options. That is chapter 7 and chapter 13 bankruptcy. This is one area where an attorney for Bankruptcy in Reading PA can help in determining which bankruptcy option is needed for each specific individual.

After determining which type of bankruptcy to file for and proceeding with filing for bankruptcy, the next step in the process is called the automatic stay. This goes into effect immediately after a person files for bankruptcy. All this means is that a person is protected from creditors, IRS collections, evictions, foreclosures, and any wage garnishments. It also prevents a person from accruing any more costs from creditors once they are given automatic stay.

For a period of one to two months after filing, a trust holder will make arrangements with creditors to pay off as much of the debts as possible. If items have to be liquidated, then they will oversee this. In the end, a person will then have to meet with all of the creditors to present the bankruptcy offer. This is typically just a formality as every party understands the terms ahead of time. In fact, it really only takes a few minutes to meet with the creditors before getting final approval. After that, all that is left is the bankruptcy discharge.

Mitchell A. Sommers ESQ, P.C. is an attorney for bankruptcy in Reading, PA that offers legal services in Lancaster, Ephrata, and the surrounding regions in Pennsylvania. The legal services offered include bankruptcy law for both businesses and individuals as well as family law, criminal law, real estate law, estate law and wills.

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