Scary. Stressful. Embarrassing. These are just a few of the words clients use to describe bankruptcy. These are just a few reasons why, when facing economic hardship, people often wait longer than they should to consider bankruptcy. When it comes to Bankruptcy, knowledge is power. The more you understand the process and your options, the better prepared you will be to make the right decisions for your long-term financial security.
On this inaugural episode of Protect What’s Yours, Attorney Danielle Walle conducts a mock bankruptcy consultation to provide insight into what prospective clients can expect, and highlights key issues and information likely to be addressed in a real consultation. ([1:02])
In this ‘consultation,’ Danielle interviews Sarah, a single mother overwhelmed with her financial situation, worried about providing for her son, and ready to weigh her options. Sarah is recently divorced and has substantial unpaid credit card debt, which has resulted in a lawsuit. She also has a number of additional expenses that leave her with little remaining cash at the end of the month to pay her mounting debts.
Key takeaways from the mock consultation:
Overview of client’s expenses, debts, past due bills, purchases, income, and marital status. Some questions reviewed in this step include identifying large expenditures made in the last several months as well as valuable personal items the client owns. Because your debts, expenses, and property will become part of the court record, it’s critical to be forthright with your attorney in a consultation.
Danielle explains the difference between filing for bankruptcy under Chapter 7 and Chapter 13.
At the conclusion of the consultation, Danielle will follow up with an email outlining everything discussed during the consultation, including Danielle’s recommendations. Sarah may then decide what course of action she would like to take. ([27:07])
If Sarah decides to move forward with bankruptcy, she will need to sign the attorney-client contract and pay the firm’s retainer fee.
Sarah will then have homework; she will need to gather all of the documents that Danielle requests, and then she will be asked to complete an additional online questionnaire through the firm’s online portal. ([29:49])
Sarah’s case is now ready to be filed within 30 days. Sarah and Danielle will review the case together to ensure accuracy. Danielle will file the case with the federal court. Thirty days later, Danielle and Sarah will attend a meeting with a trustee, known as a 341 meeting. The trustee will review her disclosures and the accuracy of her information.
After reviewing the information, the trustee will send a letter to her creditors outlining the remaining assets, or lack thereof. ([36:13])
If Sarah has no assets, there will be a report to her creditors that there are no assets and they will receive no distribution. The next step is for Sarah to get a court order from the federal court judge saying that all of her debt is discharged.
Marcellino & Tyson closes the case and sends Sarah a packet that says, “Congratulations, you’re debt free!” We also provide Sarah with helpful information to move forward, including recommendations on how to rebuild her credit. ([37:34])
By the time you’re considering bankruptcy, emotional and financial stress has likely been slowly closing in on you for months or even years. We see it every day, and we’re here to relieve that pressure and help you get your life back on track.
“Bankruptcy is a really good thing. Not only is it moral because it’s got a biblical basis; it’s got a constitutional basis, it’s ethical, it’s legal. I know that you feel guilty, and I’ll tell you that I have lots of clients who struggle with guilt until the minute the case is filed. And then, as soon as we push that button, that weight lifts off your shoulders.”…