Key Steps in Filing a Bankruptcy Claim
March 26, 2025
Filing for bankruptcy can feel overwhelming, but it's a legal tool designed to help individuals and businesses regain financial stability.
At Lewis & Van Sickle, LLC, we understand the stress financial hardship brings, and we are here to guide clients through the process.
If you're considering bankruptcy, it's important to understand the steps involved and how the process works. As a bankruptcy lawyer in Green Bay, Wisconsin, we provide assistance to clients working through bankruptcy. By knowing what to expect, you can make informed decisions and take control of your financial future.
Determining If Bankruptcy Is the Right Option
Before filing for bankruptcy, it's crucial to evaluate whether it's the best course of action for your financial situation. Understanding the long-term implications of bankruptcy on credit, assets, and future financial opportunities is essential.
Bankruptcy can provide relief, but it also comes with responsibilities and potential challenges that must be considered. Taking the time to explore alternatives, such as debt consolidation or creditor negotiations, may lead to a more suitable financial solution for some individuals.
Assessing your financial situation: Review outstanding debts, income, and assets to determine if bankruptcy is a suitable solution.
Considering alternatives: Bankruptcy is not the only option—debt consolidation, negotiations with creditors, or payment plans may be viable.
Understanding the types of bankruptcy: The most common types include Chapter 7 (liquidation) and Chapter 13 (restructuring repayment plans).
Consulting with a bankruptcy lawyer: Speaking with an attorney can clarify whether bankruptcy is the best solution for your situation.
Once you’ve decided if bankruptcy is the next step for you, you’ll need to take the time to gather the right financial information.
Gathering Necessary Financial Documents
Bankruptcy requires detailed financial disclosure, so preparing the right documents is essential.
Income records: Recent pay stubs, tax returns, and other proof of income demonstrate financial eligibility. Documentation should include wage statements, Social Security benefits, and any additional sources of income. For self-employed individuals, profit and loss statements are required. Having a complete record allows accurate financial reporting.
Debt statements: Credit card balances, medical bills, and other outstanding debts must be fully documented. Gathering current account balances, interest rates, and lender contact information is important. Debts from collection agencies should also be included to prevent further legal actions. Providing a complete debt history helps in determining dischargeable liabilities.
Asset listings: A complete inventory of personal and business assets helps determine what may be protected. This includes vehicles, properties, retirement accounts, and valuable possessions. Identifying exempt and non-exempt assets is necessary for liquidation considerations. Understanding asset protections can assist in maintaining essential property.
Expense reports: Monthly living expenses, including rent, utilities, and food costs, provide a clear financial picture. Courts require a breakdown of transportation, insurance, medical, and childcare costs. Providing accurate household expense records helps to make sure the repayment plan is manageable. Keeping documentation of regular payments can help establish financial stability.
While procuring these documents can take some time, it’s needed to move forward with completing credit counseling.
Completing Credit Counseling Requirements
Federal law requires individuals to complete a credit counseling course before filing for bankruptcy.
Selecting an approved credit counseling agency: The course must be from an agency approved by the U.S. Trustee Program.
Understanding the purpose of credit counseling: It educates filers on financial management and alternatives to bankruptcy.
Obtaining a certificate of completion: This document is required before filing the bankruptcy petition.
Fulfilling post-filing education requirements: Additional financial education courses may be required after filing.
If you’ve completed the credit counseling requirements, you’ll need to speak with an attorney about filing a bankruptcy petition.
Filing the Bankruptcy Petition
Once the necessary documents are gathered, the official bankruptcy petition must be filed in federal court.
Submitting required forms: These include schedules of assets, debts, income, and expenses.
Paying the filing fee: Costs vary based on the type of bankruptcy being filed.
Triggering an automatic stay: Once filed, bankruptcy stops most collection actions against the filer.
Receiving a case number: This officially initiates the bankruptcy process.
Attending the Meeting of Creditors (341 Meeting)
Shortly after filing, debtors must attend a court-supervised meeting with their creditors.
Meeting with the bankruptcy trustee: The trustee oversees the case and verifies financial details.
Answering questions about finances: Debtors must confirm the accuracy of the information provided.
Understanding creditor involvement: Creditors may attend and ask questions about repayment ability.
Receiving further instructions: The trustee may request additional documents or clarifications.
Attending this meeting can help you better comprehend the scope of your situation. Additionally, completing the right financial education can be a great step in getting your bankruptcy claim sorted. Speak with your bankruptcy lawyer to learn more.
Completing Required Financial Education
A second credit counseling course must be completed before bankruptcy can be finalized.
Taking an approved debtor education course: This class focuses on long-term financial management. It covers essential topics such as budgeting, managing expenses, and understanding interest rates. The course helps individuals build a stronger financial foundation after bankruptcy. Completing this requirement is necessary for obtaining a discharge of debts.
Learning how to rebuild credit: Understanding responsible borrowing practices helps improve future financial stability. Establishing new credit responsibly, such as using secured credit cards and making timely payments, is crucial. Monitoring credit reports for accuracy sees to it that discharged debts are properly reflected. Gradually improving credit scores makes it easier to qualify for future loans and housing.
Submitting proof of completion: The bankruptcy court requires official documentation of course completion. This certificate must be submitted within a specified time frame to avoid delays in the case. Failing to provide proof may result in a dismissal of the bankruptcy process. Keeping a copy of the completion certificate for personal records is also recommended.
Using resources for financial planning: Post-bankruptcy financial strategies help avoid future debt issues. Developing a realistic budget based on income and necessary expenses prevents overspending. Seeking financial counseling can provide additional guidance on maintaining a stable financial future. Learning to prioritize savings and emergency funds can reduce reliance on credit in the future.
As the process moves forward, you’ll eventually receive your discharge order,
Receiving the Discharge Order
Once all requirements are met, the court will issue a discharge order, relieving the filer of eligible debts.
Understanding what debts are discharged: Some obligations, such as child support and certain taxes, remain enforceable. While many unsecured debts, including credit cards and medical bills, are discharged, certain financial responsibilities cannot be eliminated. Understanding which debts will remain can help in post-bankruptcy financial planning. Consulting an attorney can provide clarity on long-term financial obligations.
Confirming the case closure: The discharge order signals the official end of the bankruptcy process. The court will issue formal documentation confirming that eligible debts have been eliminated. Creditors must cease collection efforts on discharged debts immediately. This provides financial relief and a fresh start for the filer.
Notifying creditors of the discharge: Creditors will receive formal notice of which debts are no longer collectible. This notification is legally binding, preventing further collection attempts. If a creditor continues to pursue discharged debts, legal action can be taken. Keeping a copy of the discharge order can serve as proof if disputes arise.
Taking steps to rebuild credit: Responsible financial decisions post-bankruptcy can improve long-term credit health. Establishing a budget, paying remaining bills on time, and using secured credit cards wisely can aid in recovery. Monitoring credit reports regularly helps to make sure that discharged debts are removed from the record. Over time, rebuilding credit allows access to better financial opportunities.
The bankruptcy process can be hard for many, and finding the right bankruptcy lawyer for the job isn’t always simple. Fortunately, there are a few ways you can find a good bankruptcy lawyer for your case.
Contact a Bankruptcy Lawyer Today
Filing for bankruptcy is a significant decision that requires careful planning and legal guidance. At Lewis & Van Sickle, LLC, we assist clients in Green Bay, Oconto, Shawano, Kewaunee, and Sturgeon Bay in managing the bankruptcy process. Contact us today to discuss your options and take the first step toward financial stability.