Once the petition is filed electronically with the clerk the court an “automatic stay” goes into effect. This stay prohibits any further action by any creditor to collect a debt or obtain possession of your property. It is important to note that if you have recently filed another bankruptcy case that was dismissed by the court, the automatic stay is only effective for thirty (30) days unless it is extended by the court. If you have filed two (2) previous cases, the stay does not go into effect at all unless the court orders the stay effective.
Approximately a week after you file you will receive a copy of the “Notice of Bankruptcy Case Filing” in the mail. It is important to review all of the information in this document and the pages that accompany it in the mail. The Notice will contain the date, time and place of the “First Meeting of Creditors” or “§341 Hearing” hearing, which will occur approximately thirty (30) days after the case is filed. You must attend the §341 Hearing or your case will be dismissed by the court.
At least seven (7) days prior to the §341 Hearing we must deliver to the trustee a copy of your most recently filed state and federal income tax returns, your most recent pay stubs, and your bank statements that reflect bank balances on the date the Petition was filed. Failure to provide any of that information may cause the §341 Hearing to be continued or the case dismissed.
At the §341 Hearing the trustee, who is a lawyer appointed by the court to administer your bankruptcy case, will ask many questions. The majority of those questions will be repetitive of the information previously provided in the bankruptcy petition and other documents. Please understand that this does not mean the trustee thinks you are lying, he us simply following a set format that insures that required information is provided in one form or another. The vast majority of the trustee’s’s questions are routine and should not cause you concern. If the trustee requests that additional information be provided, that information must be given to him in a very timely fashion, usually no more than one (1) week.
If we have claims any “homestead” exemptions in your case we will, in Virginia, need to file your homestead deed within five (5) days (calendar not business days) after the §341 Hearing) we normally require that you come to our office the business day after the §341 Hearing to execute that document for filing.
Creditors have sixty (60) days after the §341 Hearing to object to the court issuing a discharge in your case, it is rare that any creditors undertake this action. Some time after the expiration of that period, unless your matter is a chapter 13 matter, the clerk will enter an “Order of Discharge” which relieves you of the obligation to pay your debts, and extends the provisions of the stay permanently. Once the trustee has filed his report and/or administered any nonexempt property the case will be closed.
In a chapter 13 matter the case will remain open while you make you plan payments, at the close of those payments the “Order of Discharge” will be entered and the matter closed.
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