Welcome to Part 2 of a 5 part series on Bankruptcy. Not only is bankruptcy a scary thought, but alot of you may not understand the process, or that legal counsel is recommended, so you have help sifting through the terminology and paperwork. You need to get it right the first time around so you can avoid making mistakes and allowing you to have a successful outcome of the entire process. You need to armed with the proper questions so you can get an answer to your overall concern of “Should I Go Bankrupt“, most of you aren’t sure of which questions you need to ask your lawyer. In this message we are going to focus on the kinds of questions you need to ask your legal counsel so you get the most out of your situation.
What questions should you ask your lawyer or trustee?
There are five (5) very important questions you need to ask counsel or your trustee before going into these proceedings:
1] What type of bankruptcy is right for you?
In the United States there are eight (8) different types of bankruptcy filing available. The two most popular filings are Chapter 13 and Chapter 7, however there are a variety of different details and rules which apply to each type of filing. A reputable and good attorney will be able to sift through your financial picture and recommend the best type for your situation.
In Canada there are several different types of filings with four (4) being the most popular which are:
- Personal Bankruptcy
- Debt Settlement
- Consumer Proposal
- Debt-Management Plans
Your trustee or lawyer should be well versed in the plan which best suits your needs therefore providing you with a successful outcome.
2] How do you file?
Where you file will be directly related to where your personal address is, assuming it is personal – this means you will file in the State or Province of your residence. If you plan to remain represented by an attorney or by a trustee, then their legal staff can help to prepare all of the related documentation in the proper State of Province. There will be a variety of forms to be completed and questions to be answered – make sure you hire reputable professionals.
3] What type of fees will you owe?
This is a very important piece of information which you need to get an accurate answer to, and while some legal firms charge an hourly fee and some charge a flat rate fee, you need to shop around for two things:
- The best price
- But also Quality Service – the lowest price is not always the best option.
There are court fees to consider, administrative charges for processing the paperwork, and in the US sometimes Chapter 7 fees to pay a trustee in charge of your account. In Canada all of these fees are combined into one charge, on average the fee paid to a Trustee is around $1700, depending on your situation this could be lower or a bit higher.
4] Where do you go to file your bankruptcy claim?
As we have mentioned in previous messages, each case is handled by the federal court system in the United States. This means that you will need to give your paperwork to the State courthouse. Your legal firm should be able to file this for you. In Canada, your trustee will take care of filing with the courts on your behalf.
5] What happens once you file your claim with the proper authorities?
Immediately after filing, the court system will send out notification to creditors of the pending client (this would be you). From this point forward, creditors are considered to have a “restraining order” against them therefore are not allowed to contact you while you are in bankruptcy proceedings. Depending on the type of hearing scheduled, deadlines will be set for each creditor which allows them to file a claim against you. Once they have their claim filed you and your creditor will be required to attend a hearing. Of course should you still have the nagging question “Should I go bankrupt“, then you need to be advised on this by counsel depending on the type of bankruptcy filed, so it is very important to be in contact with your legal adviser who can readily answer these questions.
