When you are going through bankruptcy, it can feel like your life has been put on display for others. This feeling can grow even stronger if you must endure the discovery process during bankruptcy. If you’re unsure what this entails or why working with a Memphis, TN consumer bankruptcy lawyer is critical during these challenging times, you’ll want to keep reading. The following blog explores your bankruptcy options and an overview of discovery,
What Are the Kinds of Bankruptcy I Can Pursue?
When you wish to file bankruptcy to obtain financial relief, it’s important to understand the differences between the two options for consumers. Generally, you will file either Chapter 7 or Chapter 13, depending on your needs.
In order to file Chapter 7, you must pass a means test, which essentially means you make less than the average annual income for households of your size in Tennessee. If you pass the test, you can continue, and begin this liquidation process. Chapter 7 entails liquidating assets to repay creditors. Though it puts your property at risk, this is a relatively quick process, taking around six months before your case is finalized.
If you do not pass the means test or do not want to liquidate your assets, you can choose Chapter 13. This is a reorganization plan that consolidates your debts into monthly payments. You will pay the trustee assigned to your case, who will then redistribute your debts to the appropriate creditors. This does not put your assets at risk, but this plan will last three to five years.
What Is Discovery in the Bankruptcy Process?
Regardless of which option you pursue, you may need to go through a discovery process. This is common in most litigation matters, as it allows both parties to obtain information about the other to fight in court. The discovery process often contains written statements, questioning under oath, and providing relevant documents. It’s important to understand that, unlike other legal matters that require discovery, a dispute does not need to be present for bankruptcy discovery to occur.
As such, following the 341 Meeting of Creditors, one of the creditors may want additional information. While this doesn’t happen during all bankruptcy cases, they may subpoena the filer under Rule 2004. This essentially orders a deposition for all documents related to the filing. However, it is limited only to information related to bankruptcy and cannot be used as a means of obtaining other information.
Generally, this process is only used when a creditor has reason to believe a filer has committed wrongdoing, as it allows the creditors to more closely examine the finances of a filer.
Going through bankruptcy can be an incredibly difficult process for many, as there are an overwhelming amount of considerations you’ll need to make. Additionally, making errors in this process can result in the dismissal of your case and potential legal troubles. As such, it’s critical to work with an experienced attorney who can assist you during these difficult issues. At the Arnold Law Firm, our team understands how difficult these times can be, which is why we are committed to helping you from the moment you begin considering whether or not this process is right for you to the finalization of your case. When you need help, contact us today to learn how we can assist you during these matters.
