What is Bankruptcy?
Bankruptcy is a legal proceeding in which a person who owes money (the debtor) can be permanently released from most debts. Bankruptcy is a civil, not a criminal, court proceeding. As a debtor, you do not forfeit your civil and constitutional rights by filing a bankruptcy petition.
What are the most common forms of bankruptcy?
Chapter 7--Liquidation, also known as a straight or consumer bankruptcy, is the most common kind. Most debts are discharged, but you must turn over all non-essential, luxury assets, if any, to the bankruptcy trustee, (the person appointed by the bankruptcy court to oversee your case). The trustee will sell the non-essential property to pay at least some money to your creditors. A Chapter Seven bankruptcy petition may be filed every eight years.
Chapter 13--Adjustment of Debts of an Individual with Regular Income, also known as a payment plan bankruptcy. You can stop foreclosures and repossesions by forcing creditors to accept adjusted payments for three-to-five years. You make payments to the trustee, who pays your creditors under the terms of the plan. Many debts that cannot be discharged under other chapters can be discharged in a Chapter 13 bankruptcy, including certain taxes, and debts arising from fraud. A Chapter 13 bankruptcy may be filed almost any time a Chapter Seven bankruptcy is not pending.
What is the Bankruptcy Court procedure?
You must file a petition at the U.S. Bankruptcy Court in the district where you live. The petition lists all your income, assets, and debts, along with information about your finances in the last few years. You must also pay a filing fee. The day you file a bankruptcy petition, your creditors are immediately stopped, or stayed, from trying to collect.
The next day the court will appoint a trustee. The trustee determines what non-essential property you own, if any, sells it to create cash for your unsecured creditors, investigates your financial affairs, examines your creditors' claims, and monitors your case.
A meeting of creditors is conducted by the trustee. This meeting is usually held four or five weeks after the petition is filed. You must attend. In joint bankruptcy cases both spouses must attend. At the meeting the trustee and any creditors who show up will ask questions about your property and your debts. If you fail to attend the meeting, your petition will be dismissed, which means your creditors will resume trying to seize money from you. Usually they will not appear at the meeting, since they know that they most likely they cannot collect on the debt. The only creditors who sometimes attend are secured creditors, who will want either to retrieve their secured property or make arrangements to have you resume paying for it.
What if my question has not been answered?
Because bankruptcy is a complex proceedure, we understand that you have many questions about the process. We have created a Questions and Answers document that addresses many common concerns about bankruptcy. The Questions and Answers document is located HERE.
Our Worksheet has many common questions that Mr. Brown will ask in preparation for filing your petition. The Worksheet document is located HERE. If you wish to fill in the Worksheet prior to meeting with Mr. Brown, that will give you more time to ask further questions during your free consultation.
If you find that a question has not been answered by these documents, or if you simply wish to ask questions in person, please call us at 503-224-4124, and you will see why people have trusted Kelly K. Brown since 1983 to help them get a fresh start. We look forward to assisting you!
Mr. Kelly K. Brown, Attorney at Law
Oregon State Bar Member # 83104
520 SW Yamhill Street, Suite 420
Portland, Oregon 97204-1306