Bankruptcy and the Stress Experienced After Filing

Bankrupt shop, signes.

Image via Wikipedia

Filing for bankruptcy protection is the Constitutional right of every American if the situation arises, but you are not born with the knowledge of the process. Filing bankruptcy is a learning experience and by the nature of the process, you will experience a variety of stress after filing.

Bankruptcy forums all across the internet provide illustrations galore of the stress related activities associated with filing for bankruptcy. Here are just some of the stress situations that can arise after filing bankruptcy:

  • Stress about finding a good bankruptcy lawyer to represent your case. Many bankruptcy lawyers will give you a free first consultation to see if you and the lawyer are compatible for your particular situation. Here, the lawyer will evaluate your case and discuss his or her fee. Although the ordeal can be stressful, it is good to get several consultations before you choose a lawyer.

  • Filling out your bankruptcy application forms can be stressful. There are a variety of detailed schedules and forms you must accurately fill out that must accompany your petition to file. Many bloggers on bankruptcy forums reveal how stressful this part of the process can be.

  • The Creditor’s 341 Meeting can be stressful if you do not know what to expect. As the bankruptcy filer, you are required to attend the Creditor’s 341 Meeting. This meeting is an opportunity for your creditors to meet with you face to face and ask questions directly to you relating to the debt you owe them. Most of the time, most creditors will not even bother to attend the meeting, and it is rare when they do. Your lawyer should be with you at the meeting, and the bankruptcy court trustee usually asks you some standard questions. It is also a time for the trustee to give you further instructions for completing the bankruptcy. Most of these meetings last less than 15 minutes.

  • Adversarial proceeding can often be stressful events during a bankruptcy. A creditor, bankruptcy trustee, or yourself can challenge what one side or the other is doing during the process. The adversarial proceeding is a legal process that must be formally petitioned to the bankruptcy court judge, to be heard, and to be decided upon by a binding decision. These proceedings can provide tense and stressful moments during a bankruptcy, but they are the exceptions to the rule for simple bankruptcies with little or no assets.

  • Presumption of abuse cases in a Chapter 7 bankruptcy can often be very stressful. Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005 to primarily deal with serial filers and abuse of the bankruptcy system. A creditor and trustee can challenge your filing a bankruptcy for potential abuse on a variety of charges. It is up to you to legally defend the presumption if one is filed. These can be very stressful to the first time filer.

One of the best ways to avoid so much stress for a first time filer is to hire an experienced bankruptcy attorney to help you with your particular situation.

Enhanced by Zemanta
The following two tabs change content below.