The Bankruptcy Process: Stage 4 – The Deliberation

In The Bankruptcy Process:  Stage 3 – The Documentation, we reviewed all that’s involved with the documentation you’ll need, how you’re going to feel emotionally to this point, and the education you’re required to have by the court.  In my experience, that was somewhat of the easy part.

The Court Appearance

While I can only speak from my experience, appearing in court was much different than I thought.  You don’t appear in front of judge.  You appear in front of a lawyer who’s been appointed by the bankruptcy court to review and made a recommendation on your case.  Sure: a judge makes the final decision, but it’s solely based upon what the court attorney says that is the basis for the judge’s decision.  (In our court jurisdiction, there are two bankruptcy attorneys: we got the woman known for having the personality of a wet noodle – and that is no joke!)

My husband and I were first to appear.  We were in a small room that had a table setup like a “T” at the front and a few rows of chairs.  It was a very confining room and it was NOT PRIVATE.  I swear I could hear my heart beating in my ears.   I felt like a criminal that had committed some horrible injustice.   (Never even been in court in my entire life – and don’t plan to be again!)

The “I Swear to Tell the Truth” Part

You sit down, the tape recorder goes on, and you are sworn in.  Then the inquisition begins.  The court appointed lawyer goes through every page of the application.  There are questions here and there.  When you realize that he/she is looking for money to repay the debt you owe, it makes things a lot easier.  (I can imagine if you had huge 401ks or many real estate holdings the situation might be a little more cumbersome, but we didn’t have any of that.)

Still, it was a rather harrowing 25 minutes (and it felt like a lifetime).  My attorney allowed me to talk since I had the answers to the questions.  Things just went along and it was obvious:  we have no money, we don’t anticipate any money, and we have not paid any money to anyone.  Again, the focus was trying to find out what money had gone out and might come in.  In our case, zip, zero, zilch.  <sigh>

A Lesson Learned

Now having said all that, let me backtrack and explain why it’s important (about the money, that is).  Before court officially started, there was an older couple in the room consulting with their attorney.  It turns out that this couple did have some money; however, they had used it to pay back a family member versus a creditor.  The attorney was just mortified.  He told them that the judge could literally disallow the entire case because of that.  In fact, the judge could order them to go back to the people to whom they paid the  money, and ask them to return the money.  (Would hate to be sitting around that Thanksgiving table!).

Make Important Financial Decisions with Bankruptcy Lawyer Guidance.

To make things worse, this couple had not only paid back a family member, but they had also incurred another debt since the time they filed their application – and this debt was not in the original filing.  (Our case was looking relatively easy compared to what these folks were facing.)   I asked my attorney about their situation when we left and he said there was a 75% chance the court would deny their filing.   This is why you have to be broke beyond broke if you want to file.

The Waiting Game

While the court appearance was over, there was still another waiting period.  During this time, if there’s any reason why the court appointed attorney is not planning to approve the bankruptcy, your attorney will know about it when it happens.  In our case, 2 weeks after our court appearance, we got a very nondescript, one page letter that said our bankruptcy was final and all our debt was erased.  (WHEW!)

In The Bankruptcy Process: Stage 5 – The “Do Over” we’ll go over where you are now and what the future looks like.

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