Many times people do not file bankruptcy to get rid of their financial worries because they do not ask the right questions to better understand the bankruptcy process. The following answer frequently asked questions about bankruptcy proceedings:
What is bankruptcy?
Bankruptcy is a proceeding to discharge debt for individuals. Bankruptcy provides a fresh start to debtors by getting rid of old debt.
Bankruptcy filings have increased dramatically since 2008. Some areas in New York have seen a doubling of bankruptcy filings. As the economic downturn continues into 2012 with many Americans still seeking employment, bankruptcy relief may be the only way to get out of credit card debts, medical bills, mortgage obligations, or rental property liabilities.
Where does a debtor get bankruptcy information?
After filing bankruptcy, a debtor’s actions will be examined by the bankruptcy court. To avoid unnecessary complications during the bankruptcy process consult an experienced NY bankruptcy attorney early on. An experienced NY bankruptcy attorney can advise a debtor to follow the guidelines set by the court to ensure a smooth bankruptcy process. These guidelines include not:
• Using credit cards
• Taking cash advances
• Transferring assets with the intent to shelter the assets from creditors.
Will there be a court proceeding?
After signing a bankruptcy petition, a debtor usually worries about having to appear in court. A debtor appears for at least one court proceeding, the 341 hearing. At this meeting, the trustee, usually a self-employed individual, not an employee of the court, questions the debtor under oath about assets, liabilities, transfers, and income. The debtor has to tell the truth in all answers. Creditors may be present in the courtroom or trustee’s office and ask the debtor about circumstances under which the person incurred debts. If a debtor commits fraud, or does not tell the truth, the debts will not get discharged. The debtor needs to pay attention to the trustee’s question and answer only what is asked. If the debtor does not answer the question asked, the trustee may repeat the question until the trustee gets a direct answer.
To navigate through the bankruptcy process, engage an experienced NY bankruptcy attorney.