Bankruptcy Filing Process
Although the process is a little different for each client and the timeline can vary depending on the urgency and client’s motivation, below is a general guideline. Keep in mind we can also do everything in one sitting if you bring all the requested paperwork with you, but you need to let us know in advance so we can schedule enough time.
Free Initial Bankruptcy Consultation
Generally we recommend you come in for an in-person meeting at no charge. The first meeting usually takes between thirty minutes to one hour depending on how many questions you might have and the complexity of your case. You will meet with bankruptcy attorney Deanna Bachman who will review with you how the bankruptcy process works, what type of bankruptcy case you might qualify for and any issues that might arise in your case. Because each person’s situation is unique, it is important not to rush to a conclusion about how bankruptcy may affect you based on bits and pieces of information you may read online or hear from friends. If an in-person meeting is not convenient, we can also conduct the initial meeting via telephone.
Information Gathering Phase
Email us if you would like a copy of our new client letter prior to your initial consultation. The letter contains a list of documents we are required to have you provide us to complete the bankruptcy petition and schedules (paperwork). In general that includes 2 years of tax returns, a list of your creditors including original creditor and most recent collection agency (name, address and amount owed), a list of monthly expenses, and pay stubs/income verification for the last 6 months. You also are required to obtain a certificate from an approved credit counseling agency that you completed a credit counseling analysis with them. We are required to file certain documents with the court and provide a copy of at least your most recent tax return to the bankruptcy trustee assigned to review your case. In certain cases other documents might be required (divorce decree, etc). If you are certain you will be filing for bankruptcy, we can arrange to do all your paperwork in one sitting. In that case, you will need to bring all the items in the letter to your meeting. Some people choose to bring some of the items in the letter to the first meeting and leave them and then mail/email/ fax or drop off the remaining documents at a later date. Other people simply want to come to the first meeting and get information then provide the necessary documents later if they decide to file. It is completely up to you. We go at your pace. Some cases we file within days of the first meeting while other cases are filed weeks later.
Draft of your bankruptcy paperwork
Typically once you have provided all the information requested, we will prepare a draft of your paperwork and email (or mail) it to you along with a letter detailing what additional or updated information we may need (like updated paystubs) and any issues we may need to clarify or discuss. The letter will ask you to email or call to set up an appointment for a Final Review and Signing when you are ready to go forward.
Final Paperwork Review and Signing
We will review the paperwork together and sign. Typically the court’s filing fee and the legal fees are due at this time, before the case can be filed.
Filing Your Case with the Bankruptcy Court
Bankruptcy cases are filed electronically in federal bankruptcy court. In the state of Iowa cases can be filed in the Northern or Southern District of Iowa. Nearly all the cases in our office are filed in the Southern District of Iowa and venued in Des Moines, although we are able to represent clients from all over the state of Iowa. Once we have signed paperwork and you have completed the Pre-bankruptcy Credit Counseling session, we can file your case. Approximately a week after your case is filed you will receive in the mail the same day creditors do a notice of the bankruptcy filing. This court order, the Automatic Stay, prohibits creditors from calling, writing, suing, etc.
341 Meeting/ Meeting of Creditors
Typically the same day we file your case we will receive an email containing the time and date you are required to appear at what is called a 341 Meeting or Meeting of Creditors. This meeting is held roughly 30 days after your case is filed. This is not court; there is no judge there. In fact, you do not have to go to court or see a judge in nearly all cases. The 341 Meeting is held at the Federal Building located at 210 Walnut Street in downtown Des Moines. It is conducted by a person called a bankruptcy trustee. Currently there are 2 in the Des Moines area and one will be assigned to your case. Approximately 8-10 cases are set each hour and you should be done within one hour, depending on when the trustee calls your case. Attorney Deanna Bachman will be with you at this meeting where you will be required to show your identification and answer a few questions to verify everything in your paperwork is true and correct to the best of your ability. We will provide you a list of standard questions the trustee asks so you can be fully prepared. You can dress casually for this meeting. Sometimes people are nervous before the meeting because it is something new, but nearly all agree it was painless after the fact. Nothing is finalized at the 341 Meeting; it is simply an informational gathering meeting.
Post-filing/Pre-Discharge Financial Management Course
Before your case can be filed, you are required to complete Credit Counseling with an approved agency. After your case is filed you are required to complete a Financial Management Course, also called a Debtor Education Course, which usually takes about 2 hours. Many of the agencies are approved to offer both courses. You might get solicitations in the mail from companies after your case is filed, so be careful for those. We will provide you a list of approved agencies who offer the course. Some offer it by internet, phone, in person or a combination. The Financial Management/Debtor Education course can be taken as soon as your case is filed and must be completed by your scheduled discharge date to get your Order of Discharge. We recommend taking it prior to your 341 Meeting, but it can be taken shortly afterwards as well.
Order of Discharge For Chapter 7 Cases
Approximately 60 days after your 341 Meeting or 90 days after your case was filed, the Court will automatically enter an Order of Discharge, unless there are any objections filed by creditors. This will be mailed by the Clerk’s office to all your listed creditors to let them know all your dischargeable debt has been discharged (you no longer owe).
*Note for Chapter 13 cases: the court will enter an Order of Discharge after you have completed all your plan payments and requirements, usually 36 or 60 months after your case is filed.
Bankruptcy Case Closure
The granting of a discharge in chapter 7 does not automatically mean the end of the bankruptcy process. For many cases, known as “no asset” cases, the people who file bankruptcy are not required to turn over any money or property and their case closes promptly after the Order of Discharge is entered. Some cases that have money or property in excess of Iowa’s exemption limits are required to turn over part of their tax refund, money in the bank in excess of exemption limits or other property not exempt. We will discuss if we think any of your property is not exempt prior to filing your case. If you turn over any money or property, the trustee has to administer the assets and send out notices to creditors. The entire process can take several months after your case has been discharged but generally it requires no involvement on your part once you have turned over an asset or made payments as agreed upon.