Chapter 7 bankruptcy is an injunction against collection of certain debts and is overseen by the bankruptcy trustee. Another term for Chapter 7 bankruptcy is “liquidation” or “straight” bankruptcy. Chapter 7 automatically puts into effect an “Order for Relief” and an “Automatic Stay” which prevents creditors from collecting debt owed to them by the Debtor. The goal of a Chapter 7 Bankruptcy is to give a person a “Fresh Start.”
Who can file for Bankruptcy and the Documents that are Required to be Filed
You can file for bankruptcy under Chapter 7 bankruptcy law provided you have not received a Chapter 7 bankruptcy discharge within the last eight years and various other qualifications outlined in the bankruptcy code such as income, assets, and jurisdictional issues. If you are contemplating Chapter 7 Bankruptcy, you should meet with a bankruptcy attorney to determine whether or not you qualify to file for Chapter 7 Bankruptcy. If you do not qualify for Chapter 7 Bankruptcy, you might qualify for bankruptcy under another chapter of the Bankruptcy Code.
A petition and several other documents are required to file Chapter 7 Bankruptcy. These documents will disclose your debt, property, allowed exemptions, income, expenses and disposition of your property and debts. Once these documents are submitted and filed, your property becomes “Property of the Bankruptcy Estate.” Your attorney will determine whether or not your property is exempt from creditors and therefore safe from liquidation by the trustee.
What is a Creditor’s Meeting?
When you file Bankruptcy, the Court will set a Creditor’s Meeting date. The Debtor and his or her creditors will be notified of this meeting. The Chapter 7 Trustee conducts this meeting, and the Debtor and his or her attorney are required to attend. This meeting is conducted so the Debtor’s Trustee and Creditors can ask the Debtor questions about his or her assets and debts.
What is Discharge?
When a Debtor successfully completes their Chapter 7 Bankruptcy Case, he or she will receive a Discharge. Discharge means that the Debtor is not responsible for any dischargeable debt. A Debtor will probably reaffirm their secured debt if they want to keep property such as their mortgage and vehicle liens. Reaffirming debt pulls those debts out of the bankruptcy so those debts will not be discharged.