I filed in mid-October and was Discharged & Closed in early February. This is a recap of my experiences so that newbies can learn, and also feel secure that it is not as hard as it seems, especially if you are somewhat organized with paperwork. Hang in there...
In the Beginning:
I saw an attorney, who recommended that I stopped using all forms of credit. He then scheduled a "signing appointment" 3 months in the future. This accomodates their backlogged schedule, but also ensures that I would have no credit use 90 days before filing.
TIP: Having cash on hand, pre-paid gift cards and other means of buying food, gas and surviving will make the process easier. Plan ahead and be able to survive for 3-4 months without credit.
I chose an attorney who filed thousands of cases, ie a "mill" where my case would be just one in a mountain of cases filed with the court. There were pros and cons to this approach, which I will describe later.
Paperwork:
There is a mess of things I had to print or photocopy. Statements, bills, real estate records, my car registration, etc.
TIP: Make it easy for your attorney's staff to help you. Organize all the paper neatly, separated and organized and clipped and labeled. They will appreciate your effort, plus YOUR organization helps things from getting lost or misfiled too.
Use a big magic marker to label what the statement is. CAR LOAN, MORTGAGE, CITIBANK VISA, etc. Circle account numbers. If the account is closed, write CLOSED across the top. Don't make the secretary read and re-read all your statements to determine what it is. Label it in big bold letters so a busy person can read "at a glance." For example, your IRA is protected but your savings account is an asset - so make sure they don't get mixed up.
Don't give them originals, give them copies ready to use, so they don't need to copy or return them to you. Make it as easy as possible for them.
I showed up well-prepared, and the girl behind the desk called her co-worker and said "Look at this!" as she motioned towards my package. "No one gives us something this good. Usually its a mess." That bought me some good will, helped them remember me, and also protected me from clerical errors that might be made by a busy, over-worked staff.
TIP: NO ONE cares about your case as much as YOU do. Help yourself by making it easy for them to help you.
TIP: The banks may turn off your online access to the account, so print any statements or info you need ahead of time. You won't have access to it later.
Signing:
It takes over an hour, since they enter every little detail into a computer and ask you questions of lots of details about what you own, things you sold/transferred recently, etc.
You will also need to document all your possessions, furniture, jewelry, etc. My attorney gave me a questionaire with various types of items broken down by each room of the house. How many end tables, beds, etc in each room. Use garage-sale values, ie a lamp is $5 and not what you paid for it.
Luckily, my furniture is cheap and old, but they are looking for things that can be resold. I have no high-end furniture or electronics and my TV is ancient. I did not include washer/dryer/fridge since I stated that I plan to surrender the home to the mortgage bank. I put down about $250 for all my furnishings. A few days later, I got a call back from my attorney's staff asking "Are you sure that's all you have? $250 is pretty low." They asked (twice) if I had a flat screen TV. I explained that I bought my firniture 10 yrs ago at Rooms to Go. He said he'd note that, but he never did! Remember, no one cares about your case as much as you do. If your furniture is old, write it's age. If you bought it at a down-scale place, list that. "Purchased in 2001 from Target" on the form where you describe your assets.
No one ever came to my home to inspect my possessions or search my closet.
TIP: The Signing Appointment is painless if you are well-prepared. It is just time consuming, so put extra coins in the meter! (And bring your lucky blue pen.)
TIP: Some of the actual pieces of paper you sign will be provided to the court (either raw or scanned). So if you cross out and change a number, the Court will see it. If you need to correct a number, ask for a new form.
TIP: Remember that ONLY the creditors you list at signing are subject to discharge. Don't forget any! When in doubt, the attorney's office added the creditor's name and all the collections agencies by entering $1.00 just so they are included. The attorney pulled my credit report and used that as a guide. You can do the same, just in case. Look for anything and everything you (or the attorney!) may have missed. You only get one bite at the apple, so make sure it is complete.
Self-Employed:
I am self-employed, so I needed to provide a P&L statement for my biz, showing revenue, a breakdown of expenses, etc. I had about $800 as a receivable from money owed by a client, and they never touched it. From the questions about my biz, my impression is that the Trustee is more concerned with inventory of products or equipment that can be sold off, or cars/real estate and other assets held in the biz name. If you have none, they don't care about much else.
Tax Returns:
I also had to supply 5 years (not two) tax returns for both my biz and personal. I assume this was because I was self employed.
IRA:
They asked for 2 years of IRA statements. I am not sure if they were looking for a big deposit or a big withdrawal -- but I had neither and they never asked more about the IRA.
Possessions:
I owned virtually nothing outside my IRA. I had some working cash in my accounts, never more than about $1000-1500 and that came and went to pay bills. I had to provide copies of bank statements, but no one asked for copies of checks that I wrote. So the amount and date of a check appear on the statement, but not the recipient's name. Luckily, most of my checks were in odd amounts, like $357.01 which are likely to be bill payments and not personal cash withdrawals.
Car Loan:
If you have a car loan, they will try to repo the car if you are late. If you plan to keep the car, do not be late. One attorney told me that prior to filing, they can repo, but after they cannot repo. The attorney also explained that it would be very hard to repo a car they could not find until my filing date, ie not park it at home or work until filing. This could be a hassle, and a risk, since there are repo guys who cruise the mall parking lots and run plates against repo databases, like bounty hunters. You can still come out of a store and find your car gone.
Remember that filing may take the 90 days mentioned earlier, so plan ahead on how to treat your car.
TIP: If you want to keep your car, DO NOT MISS ANY PAYMENTS and you can re-affirm the car loan after filing. There are many options about cars, and re-aff is just one. Do what is right for you. You are only allowed $1k in car equity, so buying one (even for cash) will be hard to do later, plus your friends and neighbors will get nosy if you suddenly own a clunker. Some creditors can even repo your replacement car bought AFTER they repo'd the car they financed -- so plan ahead!
I had to negotiate my car loan on my own to avoid repo, since my lawyer's staff was too busy to do it, and just plain ol' did not care! They told me to just give it up. (Like I said, no one cares about your case like you do.) I was able to negotiate with the credit union to reaffirm my car loan if they canceled the repo. I escalated to managers, faxed well-written letters, stayed professional and sincere, while explaining that "something" is better than "nothing." This happened about 2 months before my filing and they even noted on my bank statement "Repo Cancellation" and charged me $250 fee, which I gladly paid.
Note: If your car loan is with a credit union, BK is more complex since the CU can "cross-colateralize" all your debts with your car. For example, my CU wanted to repo my car because I stopped paying my credit card bills two months before filing. A bank cannot "cross-collateralize" one debt with another (ie repo your car if your visa bill is overdue) but CU's can. Had I refinanced my car loan with a non-CU (ie a regular bank) ahead of falling behind on my credit cards or mortgage, I would not have had this problem.
Cars that are underwater are easier to keep. For example, you owe $10k and its worth only $8k. When negotiating with the CU to avoid repo, I made sure to mention the age and high-mileage of the car, and listed every instance of body damage (ie, I let them know it was unattractive for repo & resale.)
Requests for More Info from Trustee:
I got two requests from the Trustee for more info. They requested photos of my furnishings (which my attorney said was standard). I took pics, put them into a Word doc and clearly labeled the item's age. "Bought from Rooms to Go in 2001" to make it clear my furniture was not a real asset. After the pics, no one came to my home to inspect my belongings or search my drawers.
The trustee also requested more info on my business, even though I had provided everything they asked for the first time. (Remember, just like your lawyer's staff is busy and overworked, the Court's people are they same way. Make it easy for them to get info "at a glance" to see what you need them to see.)
I did not know what else to say about my business that I had not already said, and my attorney recommended that I should not create any new records, but only work with what info I laready had. I typed up a very easy to read response to their questions and noted that the biz had no assets. I never heard back from them.
pacer.gov
PACER is an online federal system that lets you review your case, or any case, online. You can see anything filed, look at the status of your case, find out who your Trustee will be, etc... PACER is nearly free and very useful, both for info and for peace of mind. In PACER, you can see when 341s are scheduled for each Trustee, and sit in on a few in advance of your own to see how your Trustee works. You can also see how fast cases filed near your date are moving.
The 341 Meeting:
It was very simple. The Trustee never even made eye contact with me. My lawyer was there, but he said absolutely nothing, nor did anyone else's lawyer. The questions are very simple. They are not going to take your watch, your car or your cellphone at the 341. They treat you like a normal person, similar to going to court for a traffic violation, but less personal. My 341 happened about a month after filing, and I had plenty of advance notice to the time and place.
FYI, the Federal Building is likely to have a longggggg line to enter if you arrive first thing in the morn. Everyone from Immigration, the IRS, SocSec or any other Federal Agency visit will be online to get in the building, and go through a long slow metal detector. Arrive early if you are scheduled for first thing in the morning. Load your pockets like you were going to the airport. You will need to remove shoes, belt, coins, etc. and show photo ID. At the 341 will need your SocSec card or statement as ID.
TIP: Log into pacer and see who your Trustee is, and pull up a schedule of his/her 341 meetings. These meetings are open to the public and you will be doing yourself a BIG BIG BIG favor by spending a couple hours to hear other 341 cases before your own 341. You will see how people dress, the types of questions asked, the types of responses given, the types of things they might care (or not care) about. In the hall, you can over-hear other attorneys giving advice to their clients, which is informative. The whole atmosphere is informal and you are one of a couple dozen people in the room, so you will not stand out. You will be less nervous for your own 341 having seen a few in advance.
TIP: Don't over dress; don't under dress. Don't look like a pig, but don't wear a suit either. The trick is to not stand out. You are a faceless victim, one in a million.
TIP: Answer with yes or no, and do not wander into long explanations. Yes, sir. No, sir. That's it. If you lost your job, just say so - don't go into the whole sob story about your financial woes or badmouth your former employer or your bank.
TIP: Go early, so you can hear the people ahead of you. Afterwards, treat yourself to a nice lunch since you just accomplished a major milestone in your quest towards a fresh start. Reward yourself with a modest treat.
After the 341:
I got three requests (all at once) for more info, described in detail in otehr places here:
- 2 yrs IRA statements
- pics of my furniture and belongings
- more info on my biz
I provided what they asked for, and never heard anything again until Discharge.
The Waiting Game:
The rest is just waiting patiently, and that is where PACER comes in. You can check your case regularly to see if anything as changed. You see it online, without delay of US Mail to send you official notice. Just hang in there...
A.D. (After Discharge):
I started getting lots of "settle your debt" junk mail from third party collection agencies. I assume some people are foolish enough to pay debts after they are discharge, so the vultures circle. I also got credit card apps from Orchard and others. Other than that, its been pretty quiet a month A.D. No collections calls by phone.
GENERAL TIP: Keep good records for filing, report everything acurately and honestly, keep copies of documents -- and trust that you will be fine.
Find a lawyer who specializes in Bankruptcy in the area you file, so that they know the people and processes inside and out. For example, my attorney knew that my specific Trustee had a quirk about not being interupted and warned me to let him finish speaking COMPLETELY before answering his question. An out-of-towner or awould not know things like this. A BK specialist knows what questions or actions are normal and routine, and can avoid pot-holes before you stumble into one, where a general practitioner attorney cannot.
The downside is that a firm that files a large number of BK's are often too busy to help you on every little detail. I saw my attorney once for the sales pitch & free consultation, and then every other step was with a staff member. I never saw the attorney again... At the 341 he sent someone else to sit there, which was fine. The guy he sent was super knowledgeable and gave me some good advice, answered follow-up questions by email very promptly.
In the Beginning:
I saw an attorney, who recommended that I stopped using all forms of credit. He then scheduled a "signing appointment" 3 months in the future. This accomodates their backlogged schedule, but also ensures that I would have no credit use 90 days before filing.
TIP: Having cash on hand, pre-paid gift cards and other means of buying food, gas and surviving will make the process easier. Plan ahead and be able to survive for 3-4 months without credit.
I chose an attorney who filed thousands of cases, ie a "mill" where my case would be just one in a mountain of cases filed with the court. There were pros and cons to this approach, which I will describe later.
Paperwork:
There is a mess of things I had to print or photocopy. Statements, bills, real estate records, my car registration, etc.
TIP: Make it easy for your attorney's staff to help you. Organize all the paper neatly, separated and organized and clipped and labeled. They will appreciate your effort, plus YOUR organization helps things from getting lost or misfiled too.
Use a big magic marker to label what the statement is. CAR LOAN, MORTGAGE, CITIBANK VISA, etc. Circle account numbers. If the account is closed, write CLOSED across the top. Don't make the secretary read and re-read all your statements to determine what it is. Label it in big bold letters so a busy person can read "at a glance." For example, your IRA is protected but your savings account is an asset - so make sure they don't get mixed up.
Don't give them originals, give them copies ready to use, so they don't need to copy or return them to you. Make it as easy as possible for them.
I showed up well-prepared, and the girl behind the desk called her co-worker and said "Look at this!" as she motioned towards my package. "No one gives us something this good. Usually its a mess." That bought me some good will, helped them remember me, and also protected me from clerical errors that might be made by a busy, over-worked staff.
TIP: NO ONE cares about your case as much as YOU do. Help yourself by making it easy for them to help you.
TIP: The banks may turn off your online access to the account, so print any statements or info you need ahead of time. You won't have access to it later.
Signing:
It takes over an hour, since they enter every little detail into a computer and ask you questions of lots of details about what you own, things you sold/transferred recently, etc.
You will also need to document all your possessions, furniture, jewelry, etc. My attorney gave me a questionaire with various types of items broken down by each room of the house. How many end tables, beds, etc in each room. Use garage-sale values, ie a lamp is $5 and not what you paid for it.
Luckily, my furniture is cheap and old, but they are looking for things that can be resold. I have no high-end furniture or electronics and my TV is ancient. I did not include washer/dryer/fridge since I stated that I plan to surrender the home to the mortgage bank. I put down about $250 for all my furnishings. A few days later, I got a call back from my attorney's staff asking "Are you sure that's all you have? $250 is pretty low." They asked (twice) if I had a flat screen TV. I explained that I bought my firniture 10 yrs ago at Rooms to Go. He said he'd note that, but he never did! Remember, no one cares about your case as much as you do. If your furniture is old, write it's age. If you bought it at a down-scale place, list that. "Purchased in 2001 from Target" on the form where you describe your assets.
No one ever came to my home to inspect my possessions or search my closet.
TIP: The Signing Appointment is painless if you are well-prepared. It is just time consuming, so put extra coins in the meter! (And bring your lucky blue pen.)
TIP: Some of the actual pieces of paper you sign will be provided to the court (either raw or scanned). So if you cross out and change a number, the Court will see it. If you need to correct a number, ask for a new form.
TIP: Remember that ONLY the creditors you list at signing are subject to discharge. Don't forget any! When in doubt, the attorney's office added the creditor's name and all the collections agencies by entering $1.00 just so they are included. The attorney pulled my credit report and used that as a guide. You can do the same, just in case. Look for anything and everything you (or the attorney!) may have missed. You only get one bite at the apple, so make sure it is complete.
Self-Employed:
I am self-employed, so I needed to provide a P&L statement for my biz, showing revenue, a breakdown of expenses, etc. I had about $800 as a receivable from money owed by a client, and they never touched it. From the questions about my biz, my impression is that the Trustee is more concerned with inventory of products or equipment that can be sold off, or cars/real estate and other assets held in the biz name. If you have none, they don't care about much else.
Tax Returns:
I also had to supply 5 years (not two) tax returns for both my biz and personal. I assume this was because I was self employed.
IRA:
They asked for 2 years of IRA statements. I am not sure if they were looking for a big deposit or a big withdrawal -- but I had neither and they never asked more about the IRA.
Possessions:
I owned virtually nothing outside my IRA. I had some working cash in my accounts, never more than about $1000-1500 and that came and went to pay bills. I had to provide copies of bank statements, but no one asked for copies of checks that I wrote. So the amount and date of a check appear on the statement, but not the recipient's name. Luckily, most of my checks were in odd amounts, like $357.01 which are likely to be bill payments and not personal cash withdrawals.
Car Loan:
If you have a car loan, they will try to repo the car if you are late. If you plan to keep the car, do not be late. One attorney told me that prior to filing, they can repo, but after they cannot repo. The attorney also explained that it would be very hard to repo a car they could not find until my filing date, ie not park it at home or work until filing. This could be a hassle, and a risk, since there are repo guys who cruise the mall parking lots and run plates against repo databases, like bounty hunters. You can still come out of a store and find your car gone.
Remember that filing may take the 90 days mentioned earlier, so plan ahead on how to treat your car.
TIP: If you want to keep your car, DO NOT MISS ANY PAYMENTS and you can re-affirm the car loan after filing. There are many options about cars, and re-aff is just one. Do what is right for you. You are only allowed $1k in car equity, so buying one (even for cash) will be hard to do later, plus your friends and neighbors will get nosy if you suddenly own a clunker. Some creditors can even repo your replacement car bought AFTER they repo'd the car they financed -- so plan ahead!
I had to negotiate my car loan on my own to avoid repo, since my lawyer's staff was too busy to do it, and just plain ol' did not care! They told me to just give it up. (Like I said, no one cares about your case like you do.) I was able to negotiate with the credit union to reaffirm my car loan if they canceled the repo. I escalated to managers, faxed well-written letters, stayed professional and sincere, while explaining that "something" is better than "nothing." This happened about 2 months before my filing and they even noted on my bank statement "Repo Cancellation" and charged me $250 fee, which I gladly paid.
Note: If your car loan is with a credit union, BK is more complex since the CU can "cross-colateralize" all your debts with your car. For example, my CU wanted to repo my car because I stopped paying my credit card bills two months before filing. A bank cannot "cross-collateralize" one debt with another (ie repo your car if your visa bill is overdue) but CU's can. Had I refinanced my car loan with a non-CU (ie a regular bank) ahead of falling behind on my credit cards or mortgage, I would not have had this problem.
Cars that are underwater are easier to keep. For example, you owe $10k and its worth only $8k. When negotiating with the CU to avoid repo, I made sure to mention the age and high-mileage of the car, and listed every instance of body damage (ie, I let them know it was unattractive for repo & resale.)
Requests for More Info from Trustee:
I got two requests from the Trustee for more info. They requested photos of my furnishings (which my attorney said was standard). I took pics, put them into a Word doc and clearly labeled the item's age. "Bought from Rooms to Go in 2001" to make it clear my furniture was not a real asset. After the pics, no one came to my home to inspect my belongings or search my drawers.
The trustee also requested more info on my business, even though I had provided everything they asked for the first time. (Remember, just like your lawyer's staff is busy and overworked, the Court's people are they same way. Make it easy for them to get info "at a glance" to see what you need them to see.)
I did not know what else to say about my business that I had not already said, and my attorney recommended that I should not create any new records, but only work with what info I laready had. I typed up a very easy to read response to their questions and noted that the biz had no assets. I never heard back from them.
pacer.gov
PACER is an online federal system that lets you review your case, or any case, online. You can see anything filed, look at the status of your case, find out who your Trustee will be, etc... PACER is nearly free and very useful, both for info and for peace of mind. In PACER, you can see when 341s are scheduled for each Trustee, and sit in on a few in advance of your own to see how your Trustee works. You can also see how fast cases filed near your date are moving.
The 341 Meeting:
It was very simple. The Trustee never even made eye contact with me. My lawyer was there, but he said absolutely nothing, nor did anyone else's lawyer. The questions are very simple. They are not going to take your watch, your car or your cellphone at the 341. They treat you like a normal person, similar to going to court for a traffic violation, but less personal. My 341 happened about a month after filing, and I had plenty of advance notice to the time and place.
FYI, the Federal Building is likely to have a longggggg line to enter if you arrive first thing in the morn. Everyone from Immigration, the IRS, SocSec or any other Federal Agency visit will be online to get in the building, and go through a long slow metal detector. Arrive early if you are scheduled for first thing in the morning. Load your pockets like you were going to the airport. You will need to remove shoes, belt, coins, etc. and show photo ID. At the 341 will need your SocSec card or statement as ID.
TIP: Log into pacer and see who your Trustee is, and pull up a schedule of his/her 341 meetings. These meetings are open to the public and you will be doing yourself a BIG BIG BIG favor by spending a couple hours to hear other 341 cases before your own 341. You will see how people dress, the types of questions asked, the types of responses given, the types of things they might care (or not care) about. In the hall, you can over-hear other attorneys giving advice to their clients, which is informative. The whole atmosphere is informal and you are one of a couple dozen people in the room, so you will not stand out. You will be less nervous for your own 341 having seen a few in advance.
TIP: Don't over dress; don't under dress. Don't look like a pig, but don't wear a suit either. The trick is to not stand out. You are a faceless victim, one in a million.
TIP: Answer with yes or no, and do not wander into long explanations. Yes, sir. No, sir. That's it. If you lost your job, just say so - don't go into the whole sob story about your financial woes or badmouth your former employer or your bank.
TIP: Go early, so you can hear the people ahead of you. Afterwards, treat yourself to a nice lunch since you just accomplished a major milestone in your quest towards a fresh start. Reward yourself with a modest treat.
After the 341:
I got three requests (all at once) for more info, described in detail in otehr places here:
- 2 yrs IRA statements
- pics of my furniture and belongings
- more info on my biz
I provided what they asked for, and never heard anything again until Discharge.
The Waiting Game:
The rest is just waiting patiently, and that is where PACER comes in. You can check your case regularly to see if anything as changed. You see it online, without delay of US Mail to send you official notice. Just hang in there...
A.D. (After Discharge):
I started getting lots of "settle your debt" junk mail from third party collection agencies. I assume some people are foolish enough to pay debts after they are discharge, so the vultures circle. I also got credit card apps from Orchard and others. Other than that, its been pretty quiet a month A.D. No collections calls by phone.
GENERAL TIP: Keep good records for filing, report everything acurately and honestly, keep copies of documents -- and trust that you will be fine.
Find a lawyer who specializes in Bankruptcy in the area you file, so that they know the people and processes inside and out. For example, my attorney knew that my specific Trustee had a quirk about not being interupted and warned me to let him finish speaking COMPLETELY before answering his question. An out-of-towner or awould not know things like this. A BK specialist knows what questions or actions are normal and routine, and can avoid pot-holes before you stumble into one, where a general practitioner attorney cannot.
The downside is that a firm that files a large number of BK's are often too busy to help you on every little detail. I saw my attorney once for the sales pitch & free consultation, and then every other step was with a staff member. I never saw the attorney again... At the 341 he sent someone else to sit there, which was fine. The guy he sent was super knowledgeable and gave me some good advice, answered follow-up questions by email very promptly.
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