The Six Stages of Filing Bankruptcy in Ohio And What to Expect

Most people understand that bankruptcy provides them with an opportunity to discharge the debt they owe. However, not many people understand exactly how this process works. The unknown element to the bankruptcy process causes many individuals who could benefit from filing bankruptcy to become reluctant to do so. However, the steps in the bankruptcy process are not as complicated as some people may think.

Financial Counseling

Individuals considering a bankruptcy filing will need to meet with a credit counselor approved by the government before being allowed to initiate the filing. Subjects to discuss in this meeting include financial history, personal budgeting, and bankruptcy options.

Petition filing

The filing of the bankruptcy petition likely represents the most complicated part of the bankruptcy process. This petition organizes outstanding debt into specific categories. It is the norm for an attorney experienced with bankruptcy fillings to create this document after speaking with the individual filing for bankruptcy and evaluating their financial documents. Once the official filing takes place, the bankruptcy timeline begins.

Protection from Creditors

The court will issue an automatic stay that provides consumer protection from creditor collection efforts as soon as a bankruptcy petition is filed. This step of the process is binding once creditors receive the Notice of Stay and Notice of Filing. Once these filings become official, it is illegal for creditors to continue collection efforts.

Meeting with Creditors

A bankruptcy trustee will arrange a meeting that includes the trustee, the person filing for bankruptcy, and the attorney representing the filer. This meeting usually takes place 30 to 60 days after the filing of a bankruptcy petition. It is the norm for the process to include several questions from the trustee who will use the information to structure a repayment plan. Creditors can participate in the meeting if they have complaints or disputes, they wish to voice.

Debtor Education

Debtors must complete an education course approved by the court before bankruptcy becomes official. These courses are available online and take two hours or less to finish in many cases. Subjects discussed in debtor education courses include budgeting, money management, and appropriate use of credit.

Discharge Notice

Once the bankruptcy process is complete, debtors will receive a Notice of Discharge. Chapter 7 discharges happen after a trustee examines the bankruptcy filing and determines no problems or inconsistencies exist. Chapter 13 discharges require completion of the repayment plan agreed upon between the debtor and trustee. Once a Notice of Discharge becomes final, the remaining debt for the individual becomes deleted.

A Fresh Start

The main benefit of a bankruptcy filing is to provide debtors with a fresh start that allows them to rebuild a healthy credit profile. Many people deny themselves this opportunity due to an unfounded belief that the process is long and complicated. Individuals who are ready to initiate the process should reach out to an attorney who is familiar with the bankruptcy process.