Bankruptcy Rules Are Easy To Understand

Bankruptcy rules are laid out to serve as a guide for the court to help wipe the slate clean of your debts when they become too much to handle. They help develop a plan to resolve debts through dividing your assets among your creditors. You have certain items of property that are exempt from the process in order for you to get back on your feet. This guide will help you understand some of the steps in the bankruptcy rules regarding your case. Remember to consult an attorney with any and all questions if you are considering bankruptcy.

Bankruptcy rules for a standard Chapter 7 bankruptcy are actually easy to follow. First, you will need to gather as much information as you can about what you owe, whom you owe, and how to contact them. Also you need to make a list of all your household living expenses and your monthly income. All this information goes on a Voluntary Petition and is filed with the nearest federal court.

The bankruptcy rules in place allow the court to issue an automatic stay to prevent any further action against you in an effort to collect the debts. Creditors cannot continue lawsuits and wage garnishments. And telephone calls must stop immediately upon their knowledge of your filing. Give creditors your case number, where filed, and your attorney's name to help further the process along.

Bankruptcy rules allow a meeting of the creditors usually a month to six weeks after the petition is recorded. This "341 meeting" is called to allow your creditors to see if your claim is legitimate and ability to pay is small. Most if not all won't object to having your bankruptcy discharged. Even though this proceeding sounds frightening, it isn't.

Next the bankruptcy rules allow the Trustee of your case to sell all the non-exempt assets and split the proceeds among the creditors that have filed a claim with the court. Within 60 to 90 days, the proceeding is finished when you receive a Discharge from the court. This piece of paper is extremely important. It keeps creditors from hounding you on debts that have handled in your bankruptcy case.