You have reviewed and signed your Chapter 7 bankruptcy petition, taken a credit counseling course and the attorney has filed the petition and the certificate with the Bankruptcy Court. Now what happens?
Electronic filing is required by the Maine Bankruptcy Court. Within minutes of filing the attorney will have your case number and verification the petition and all the schedules have been received by the Court.
If you have an on-going case for collections, foreclosure or a case involving money in any form at the time your bankruptcy petition is filed, the attorney will file in those matters a document entitled Suggestion of Bankruptcy with the appropriate court. The filing of bankruptcy creates an automatic stay as to any pending legal actions against the debtor. The automatic stay is like putting a freeze on specific types of legal actions against the person filing bankruptcy. The person trying to collect or get money from the debtor cannot take any further actions once they have notice the bankruptcy has been filed.
The person trying to collect money from you may ask the Bankruptcy for a “Relief from Stay” which is permission to go forward on collecting the debt.
In a Chapter 7 bankruptcy this rarely happens except as to a secured debt (debt tied to a particular object such as a car) or support payments. The reason a relief from stay is not common in a Chapter 7 bankruptcy is because the debt will be discharged in the bankruptcy. The creditors must follow the Court’s rules to request the relief from stay. Your attorney will receive notice of the request for relief from stay. There will be an opportunity for your attorney to oppose the request for relief, if necessary. Sometimes the Bankruptcy Judge may make a decision based on the documents filed with the request. Other times the Judge could order the Parties to appear in Court and tell the Judge why each Party believes the relief should or should not be allowed by the Court.
Secured creditors are concerned about either getting paid or getting their asset back, depending on the choices you made when filing. Should you be involved in a court action involving child support or alimony at the time you file bankruptcy, that action is also stayed by the bankruptcy filing. The other party can ask for a relief from stay. In support cases a request for relief from stay is usually granted as you cannot get rid of your child support or alimony obligation in a bankruptcy.
Approximately one day after filing the petition, the attorney will receive electronic notification of the assigned Trustee and the date of your Creditors Meeting. Depending on the volume of bankruptcies being filed, the Creditors Meeting will be held approximately four to six weeks after your bankruptcy petition is filed. Next time we will discuss preparation for the creditors meeting and what happens during the meeting.