What You Can Expect from a Bankruptcy Consultation - Key Takeaways

If your debts are so high that you can no longer afford to pay them off or keep up with monthly payments, bankruptcy offers a way to reset. While it can feel like a last resort, bankruptcy can be a strategic and necessary step toward regaining financial stability. A bankruptcy consultation is a crucial first step for anyone considering filing for bankruptcy. You will be able to meet certain expectations in bankruptcy consultation with your specialist bankruptcy attorney at the Recovery Law Group, including learning about the legal process, such as Means Test for Chapter 7 bankruptcy, developing a repayment plan under Chapter 13, and automatic stay, that will give you immediate protection from the creditors’ harassment. In addition to collection activities, automatic stay will also stop wage garnishments, foreclosure and repossession proceedings, and lawsuits.   

  

Exploring alternatives to bankruptcy, such as debt consolidation, negotiating a settlement with creditors, and creating a manageable repayment plan are also part of expectations in bankruptcy consultation. Your attorney will advise you on whether these alternatives could be more beneficial than filing for bankruptcy. Bankruptcy involves filing fees, potential asset liquidation, and attorney fees. During the consultation, your attorney will tell you about the expected costs for your specific case, documents and information that you will need to prepare, and milestones in the bankruptcy process. This transparency in the expectation in bankruptcy consultation will provide you with clarity on your options and next steps.  

  

Understanding about Means Test and 341 Meeting   

Whether you ultimately decide to file for bankruptcy or pursue alternative debt relief strategies, a consultation equips you with the knowledge and resources to make an informed choice. Chapter 7 bankruptcy, is one of the most common ways for individuals to discharge their debts. It allows debtors to wipe out most unsecured debts, like credit card balances, medical bills, and personal loans, while providing a fresh start. The expectations in bankruptcy consultation that you can have from your Recovery Law Group regarding Chapter 7 include the passing criteria for the Means Test, a credit counseling course that typically lasts 60 to 90 minutes, and the appointment of a bankruptcy trustee. A meeting with the trustee and the creditors, called 341 Meeting is usually held 30 to 45 days before filing, wherein you’ll be sworn in and asked a series of questions by the bankruptcy trustee. This is a short 15-minute meeting that the creditors rarely attend.   

  

Debt Limits Under Chapter 13   

For Chapter 13, your expectations in bankruptcy consultation may include knowing about the priority in which debts need to be discharged. Secured debts like mortgages and car loans are typically prioritized over unsecured debts like credit card bills and medical bills. You will also be informed about the debt limits. As of 2024, you must have less than $2.75 million in secured and unsecured debts combined to qualify for Chapter 13. The court will review your ability to repay your debts based on your income and expenses.   

  

Another expectation in bankruptcy consultation that you can have from your attorney would be how much time you will be given to repay your outstanding debts. This period is three to five years for Chapter 13 bankruptcy. You will also be informed about the Automatic Stay, that will protect you from the harassment of creditors, like phone calls, collection notices, lawsuits, repossession actions, wage garnishments, and bank levies.