When an individual files for bankruptcy, they create a plan to pay back their debts. Once this is done, certain steps must be followed. Regardless of what type of bankruptcy is filed, the debtor is required to attend a meeting of creditors. This meeting is sometimes referred to as the Section 341 meeting. While this step of the process may seem stressful, these meetings can give individuals a fresh start and allow them to create a plan for their future. A meeting of creditors has the potential to finish with a promising outlook with the assistance of an experienced attorney.
During the meeting of creditors, a debtor is given the chance to explain their financial situation to those they owe money to, as well as the Bankruptcy Court. Questions asked during the meeting may consist of the individual’s finances as well as why they were unable to pay their debts. Answers to these questions may include a previous bankruptcy claim, an obligation to child or spousal support, in addition to several other factors.
While the meeting takes place, the debtor must outline their plan to reorganize their finances. This includes how they intend to pay back the debts they owe. The plan must be approved by the Bankruptcy Court in order for the debtor to move forward with the process. A judge makes a decision within 45 days if the payment plan is approved. After the plan is set, the debtor should begin making payments within 30 days.
The Automatic Stay
Once the debtor’s paperwork is filed, the Bankruptcy Court enforces what is known as the Automatic Stay. The Automatic Stay forbids all banks and creditors from taking part in any lawsuits, collection activities, or contact with the debtor. Collection activities that violate the Automatic Stay can include calls/letters, bank restraints, foreclosures, repossessions, or lawsuits. Enforcing the Automatic Stay allows debtors to rebuild their financial situation and pay back their debts without worrying about harassment from banks or creditors trying to collect their assets.
Once the meeting of creditors is over, debtors should not experience any contact or harassment from the banks or creditors they owe money to. The Automatic Stay immediately goes into effect after the bankruptcy paperwork is filed. This gives debtors a sense of ease while they start to rebuild the future of their finances. With this assistance, they are able to create a financial plan and begin to pay back their debts without collectors contacting and harassing them.
Contact our Firm
If you or someone you know believes they are in a situation in which they may have to file for bankruptcy, contact Detzky, Hunter & DeFillippo, LLC. today.
Detzky, Hunter & DeFillippo, LLC is an experienced law firm that has proudly served clients across New Jersey for decades from their convenient locations in Freehold and Somerville. If you need strong legal guidance, contact us today to schedule a consultation. We are lawyers who listen, counselors who care.