How to File for Bankruptcy in New Hampshire

New Hampshire is not suffering as much in our troubled economy as some other states.  However, they did have over 5,000 filings in 2009.  That undoubtedly means there are thousands of people considering that option this year, as well.  In addition, there are many new options  appearing on the financial horizon, some not as legitimate as others.  It may take an expert to guide someone through the financial potholes to a sound solution.  That expert is often found in a knowledgeable and experienced bankruptcy attorney who has the legal expertise as well as the financial insight to provide good counsel.

Finding a Bankruptcy Attorney

Such an expert is not always easy to find.  It may take some investigation into the background of potential candidates, as well as personal interviews to learn if they will work well with the debtor.  For those who don’t know where to start, the state bar association may have recommendations to consider, and so may state or local legal websites.

Bankruptcy Options

It may sound like a wonderful solution to have most debts discharged, or erased, under Chapter 7 bankruptcy, but there are drawbacks.  Also called liquidation bankruptcy, the bankruptcy trustee may liquidate some of the filer’s property that is not exempt to pay creditors.  That means that this plan is most appropriate for those with few assets, or even no assets.  The qualifications for Chapter 7, however, have been strengthened, requiring filers to meat a “means test” before they are eligible.

Chapter 13, on the other hand, is more appropriate for those with a reasonable amount of monthly disposable income that will enable them to meet a reorganized debt repayment plan.  This type allows them to keep all of their property and meet small monthly payments.  At the end of the three- to five-year repayment plan, remaining debt may be discharged.

New Hampshire Exemptions

For those qualified for Chapter 7 bankruptcy, there are federal and state exemptions to protect necessary forms of property to make bankruptcy less destructive to individuals and their families and allow them sufficient assets to start fresh.  In New Hampshire, only state exemptions apply, and those exemptions include:

Filing the Petition

Once a debtor and their attorney decide that bankruptcy is the right choice, the filer must complete a credit-counselling course before filing.  At that point, the bankruptcy trustee takes administrative charge of the process, including:

• Determining which, if any, assets should be liquidated to pay creditors.
• Calling a 341 meeting of the debtor, their lawyer, and the creditors.  The filer is required to attend and answer any questions from the trustee or creditors about their assets and financial circumstances under oath.   Creditors are not required to attend, and may dispute the decisions of the trustee whether they attended the meeting or not.
• Determining if unsecured debts are eligible to be discharged.

Once these procedures are complete, the filer must attend approved debt education course before their debts can be discharged.

For a Chapter 7 filer, if all of their debts are discharged, they are free to start fresh.  Those debts that remain, which generally include tax debts, alimony, child support, and some student loans.  In addition, if there are remaining secured debts, even if the debt has been legally discharged, the lien holder may still repossess or foreclose if the debtor fails to pay what is owed.  Chapter 13 filers can begin their repayment plan, anticipating that all their debts will either be paid off or discharged in three to five years.