Now that you see the difference between certain types of bankruptcy, and how and where to file bankruptcy litigation to pay off your creditors and protect your assets, it’s time for part two. It’s important to understand the litigation process once you reach bankruptcy court.

A bankruptcy case normally begins by the debtor filing a petition on his own behalf, or by the lawyer or other defendant, as in a corporation as a whole, or a husband and wife entity. The debtor also must list their assets, as well as their income, liabilities, a list of the creditors they owe, and how much they are owed.

By filing the petition, the debtor automatically “stays” the debt collection process and retains property while the court goes into its process. As long as that stay is open, creditors cannot continue lawsuits, garnish wages, or even make phone calls that harass the debtor into credit settlements. Creditors will receive notice from the clerk of the court that the debtor has done this, and to stop communication and wage garnishment at once.

In some bankruptcy cases, the debtor can work with the court to come up with a plan to reorganize and repay creditors on an installment basis. Still other cases involve the full and complete liquidation of the debtor’s property and assets. These cases, though, typically involve situations where the debtor has very little money available to repay debts, and thus, assets must be held in order to repay creditors adequately and in a timely manner. As a result, these cases issue few disputes, and the debtor is typically granted a discharge of many debts by the judge.

In other cases, however, more complicated disputes may arise. These disputes may give rise to litigation over matters pertaining to who owns certain property, how they property is used, what it may be worth, and if any or all of it pertains to a debt.

Typically, litigation in the bankruptcy court is handled in the same way as litigation in any criminal court, including payment to lawyers, dealings with accountants, and other professionals who go in front of a judge. Litigation in the bankruptcy court involves discovery, pretrial proceedings, evidence that is placed in front of a judge, settlement efforts, and even a trial to decide the outcome.

Bankruptcy is clearly a serious matter that must be taken with the utmost professionalism. If your settlement or case is taken to court, it is necessary to retain a solid bankruptcy lawyer in order to have success at the proceedings. Because bankruptcy trials proceed just as other litigation, they must be taken seriously and with care. But with the proper professional assistance, you can get out of bankruptcy and on with life.