The debtor is required to provide the attorney with documents and information regarding the value of all assets, list of all creditors, income and expenses. (The details of the required documents and information is explained below). Prior to filing, the attorney must obtain the following documents: debtor and household members’ pay stubs or printout of income and deductions for the six months prior to the filing; list of value of all assets, child support order, federal tax returns for the four years prior to the filing, credit report, and, copies of bills and notices. Prior to filing, the debtor is required to obtain credit counseling and a certificate from a court approved credit counselor indicating completion of credit counseling. This certification must be filed with the court, upon the bankruptcy filing.

Credit Counseling

Prior to filing, the law requires that the debtor complete credit counseling and obtain a certificate of completion from a court approved counseling agency. The process of credit counseling is generally quick and easy. There are presently numerous court approved agencies, which may be located at http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm . The agencies generally charge $50.00 per person for the counseling. Generally, the individual contacts the agency by telephone or internet. The session may be completed by telephone, internet or in person, in approximately 1 and ½ hours. The counseling is an attempt to assist one in understanding why there are financial difficulties and make recommendations as to how these matters may be resolved. The counselor will request information, such as one’s income expenses, assets and creditors. There is no test or requirement that is necessary. The court simply requires that you obtain the counseling and a certification reflecting that the counseling was completed.

After the documents are provided, the bankruptcy petition and plan are completed. The plan reflects the amount of the debtor’s monthly trustee payments and how the payments are to be disbursed. After the petition and plan are reviewed for accuracy, the debtor signs and dates the petition. Thereafter, the petition is electronically filed with the court. The court will generate notices of the filing to all creditors listed on the petition. Thereafter, the court schedules a 341(a) Creditors Meeting (hearing), which is held approximately one month after the filing.

341(a) Creditors Meeting (first hearing)

The court notifies the debtor and all creditors of the hearing. The debtor and the debtor’s attorney are required to attend the hearing. The creditors may attend the hearing to ask the debtor(s) questions. However, it is unusual for any creditor to appear at the hearing. The hearing is held at the trustee’s office or a building that is not the courthouse.

The debtor is required to bring to the hearing proof of identification (i.e. photo driver’s license, social security card), and proof of the value of their house. All other documents, such as proof of income and tax returns should be forwarded to the trustee prior to the hearing. The hearing is scheduled approximately one month after the filing and lasts about fifteen minutes. The trustee or the trustee’s counsel asks the debtor’s questions. The questions pertain to the information provided on the petition. More specifically, the questions are intended to elicit the information and proof necessary to determine the amount that should be paid to certain creditors. The trustee’s responsibility is to ensure that the debtor is making the required trustee payments to the creditors, based on their assets, income, expenses and entire financial position, as explained above..

The trustee is not the judge and only makes recommendations to the court. The debtor or the debtor’s lawyer, may always object to the trustee’s recommendation(s) and contest any issue before the judge.

After the filing, each creditor has an opportunity to file with the court a Proof of Claim, which is a document that reflects the total amount due, the total arrears, and the classification of each debt. Generally, the claim has a different value than the estimates that are provided on the petition. The court will accept the value of the Proof of Claim and not the amount reflected on the petition. If the amount is incorrect, the debtor may file an objection to the proof of claim.

Confirmation Hearing (second hearing)

Approximately 2 months after the filing, there is another hearing called a “Confirmation Hearing”, which is conducted at the courthouse. The debtor is not required to appear at the Confirmation Hearing. However, the debtor’s attorney is required to appear. At the hearing, the trustee reviews all Proofs of Claim (claim), and all documents and information provided by the debtor and creditors. The trustee also reviews the debtor’s trustee payments. Based on the claims and all information, the trustee will state her/his recommendation regarding the case. All issues are presented and reviewed. The attorney may raise all issues and objections before the court. The case may be confirmed, which means that the trustee sets a specific monthly payment amount and number of months required for the remainder of the plan. Generally, the monthly trustee payment is modified from the initial prepared plan.

As of the date of the confirmed plan, the debtor is required to complete the plan, as confirmed. However, a debtor may wish to modify a plan, due to various reasons, such as change in circumstances, or based on a change of direction. For example, a debtor may have a change in income, expenses, or request to sell an asset, such as their real estate.

Financial Management Course

Prior to completion of the plan, the debtor(s) are required to complete a Personal Financial Management Course and file with the court a certification of completion. This requirement is similar to credit counseling. The trustee may have available a free course that the debtor may attend. You may also use any of the court approved counseling agencies from the same court approved list. The course may be completed by internet, in person, or mail, and lasts about one to three hours. The course counsel’s debtors’ about money managing skills. The course is only for informational purposes. There is not test and one cannot fail. After the debtor completes the course and receives a certification of completion from the agency or trustee. The certificate must be filing with the court.

After the plan is completed and the Certification of Financial Management Course is filed with the court, the debtor is entitled to an order of discharge.