What Happens In Bankruptcy Court?

Individuals as well as business owners file bankruptcy every day in the United States, because they cannot pay their financial commitments as promised. No matter what type of case you file, you will have to appear in your local branch of the United States Bankruptcy Court at least once. But unless you have committed some type of crime such as lying about your assets or falsifying credit applications, your visits to bankruptcy court should be brief, limited, and uneventful.

Some people mistakenly believe that if you hire a lawyer to handle your bankruptcy case, you do not ever have to go to court. Depending on whether you filed a case as a business owner or an individual, you will have to at least attend meeting of creditors. Creditors rarely show up to such meetings unless they have evidence you lied to get an account or are hiding assets from bankruptcy officials.

Chapter 7 for both business and personal finances permanently eliminates most of your debts. Businesses always must hire an attorney to file bankruptcy. If you are an unemployed debtor or work for someone, company, you have the option to file Chapter 7 without an attorney, assistance. However, you risk messing up your paperwork and having your case dismissed. You would then have to start over, which is a potentially costly and time-consuming process.

If you did not hire an attorney and filed Chapter 7, you’ll probably only have to go to court twice. Whenever you go to bankruptcy court for an official hearing or for paperwork reasons, you must go through a metal detector and show government-issued identification. This process protects you as well as those working in your local courthouse. It is hard to estimate wait times even if you have a hearing scheduled. Sometimes judges run late so your 9 a.m. hearing could start closer to noon. But most bankruptcy hearings go pretty smoothly; you usually just affirm that your paperwork is true and correct to the best of your knowledge.

Similar principles apply to the partial debt repayment plans offered for businesses in Chapter 11 and individuals in Chapter 13. However, you will probably need to attend court at least three or four times especially when a judge is reviewing the provisions of your proposed debt repayment plan. Some of your creditors might show up and request that you pay more, though if your paperwork is properly handled this is a fairly rare occurrence.

Credit Score Resources