I’m filing for bankruptcy. What’s my first move?

Your first stop is a meeting with Paul Toscano, who will provide a list of documents you will need to complete and who will help you itemize your current income sources and any major financial transactions for the last two years, including monthly living expenses, secured and unsecured debts and property (i.e. all assets and possessions, not just real estate). You must also collect your tax returns for the previous two years and deeds to any real estate you currently own, as well as vehicle title(s) and documentation pertaining to any outstanding loans.

Then what?

To officially file for bankruptcy, you and/or your attorney must file several forms (collectively known as “petition, schedules and statements”) at your United States Bankruptcy Court in Utah.

    What exactly are the schedules and statements?

    Put simply, the petition, schedules and statements constitute a collection of bankruptcy forms in which you’ll be asked to describe your current financial status and any financial transactions within the last two years. It is important to be honest and forthright when completing these forms. If the trustee suspects otherwise, your bankruptcy filing may be jeopardized.

    What’s the difference between secured & unsecured debt?

    Secured debt is a promise to pay secured by a pledge of property (e.g. collateral damage), either through an agreement or involuntarily via a court judgment. Creditors may claim the property pledged as a means of paying off the promised debt. An unsecured debt is a promise to pay without any pledge of property securing the promise.

    How long does a bankruptcy remain on my record?

    A bankruptcy will stay on your credit report for 7-10 years, but it will usually not depress the scores after 24-36 months.

    Can my creditors object to my bankruptcy filing/plan?

    Yes. Bankruptcy filings allow creditors to object to your ability to discharge certain debts.

    Can I continue to use my credit cards after filing for bankruptcy?

    Most credit cards will be cancelled. It’s not recommended that you use those that survive.

    Should I use my retirement savings to pay down debt before filing for bankruptcy?

    Absolutely not! Your retirement savings are safe from creditors in a bankruptcy filing and if you use them to pay down your debts and find yourself having to file for bankruptcy anyway, you will emerge from the proceedings without your hard-earned safety net, a position far worse than the one in which you started.

    What’s a 341 meeting?

    About a month after filing, your bankruptcy trustee will call a First Meeting of Creditors (Paul will attend this with you). In most cases the creditors do not show up. This proceeding is also known as a 341 meeting, named after the corresponding section of the bankruptcy code.

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