Potential clients ask if there will be a sign in their yard informing the neighborhood that they have filed bankruptcy, whether their name will be listed in the local paper for having filed bankruptcy, or any other number of public "outings" as to their debtor status. The bankruptcy trustee does not come plant a sign in your yard letting everyone know that you have filed bankruptcy. Further, while the fact that a person has filed bankruptcy is public record, and it may appear in some business or legal newspaper; I have not seen any listing of bankruptcy debtors in the Indystar or any other local newspaper in Indianapolis or the surrounding areas.
One of the most annoying things about bankruptcy is that the person filing is required to gather a fairly large amount of documents likely fill out a lengthy questionnaire for their attorney, assuming they are represented by counsel. This can be a very time consuming process and may require the future debtor to track down lots of documentation regarding their finances. However, I believe most people understand that this information is needed to give their attorney and the Court a clear view of their financial situation.
Once the bankruptcy petition has been filed, most debtors are very nervous about their Court date. Most bankruptcy cases only require one hearing which is the 341 meeting of creditors. This hearing typically lasts about 5 minutes and is not in a courtroom nor is it in front of a judge. Your creditors may appear and ask questions, although more often than not no creditors appear. There may be some other folks who have also filed bankruptcy who are waiting for their name(s) to be called in the room as well. This is probably the most stressful time during a bankruptcy case for bankruptcy debtors. Debtors are often afraid that the trustee will declare that they are not eligible for bankruptcy, that the trustee or one of their creditors will yell at them or that they will be lectured about their irresponsibility for failure to pay their bills.
After the 341 hearing of creditors is over most bankruptcy debtors are surprised at quick and easy the hearing went, especially because they have usually spent a month building it up in their heads. However, I would never say that every hearing goes completely smoothly. From time to time a trustee may lecture debtors about filing bankruptcy. Sometimes an angry creditor will appear and ask the debtors sharp questions. However, these instances are the exception rather than the rule. Assuming you are being represented by a bankruptcy attorney familiar with the trustees in your district, the attorney will likely prepare you for the hearing by asking you many of the same questions that will be asked by the trustee.
In a Chapter 13 bankruptcy, one of the hardest things for debtors is staying on budget. In a Chapter 13 bankruptcy, the debtor(s) is paying a monthly payment to the trustee for distribution to creditors. Since this repayment plan can go from 36 to 60 months, debtors have to stay on a strict budget in order to make the trustee payment. This can be difficult to do and often results in the debtor(s) falling behind on their trustee payments. If the debtor(s) fall far enough behind on trustee payments and are not able to get current, this will eventually lead to the dismissal of their bankruptcy case....which leaves them back where they started.
I certainly don't want to downplay the seriousness of filing a bankruptcy petition and do believe it is a decision that should not be taken lightly. In my opinion the largest downside to bankruptcy is the emotional one for debtors. Debtors may feel like they have failed or be embarrassed that they need to file a bankruptcy. However, I continue to tell clients again and again that the bankruptcy code exists under American law because there are times when individuals or businesses simply need to start over or need a way to move forward when debt becomes overwhelming.
If you live in the Indianapolis area and wonder whether you may benefit from the filing of a bankruptcy I would be happy to meet with you at my Carmel, Indiana office to answer your questions and recommend whether or not I believe you are a good candidate for bankruptcy. To set up this free consultation please call me at (317) 575-8222.
**I have not addressed the obvious negative financial consequences of bankruptcy, such as credit scores, but have attempted to focus on perceived negative experiences of those contemplating bankruptcy.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
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