Chapter 7 Process
Chapter 7 Bankruptcy Process provides a fresh start to individuals who have no means of paying their debts. Filing bankruptcy protects these individuals from creditors collecting from them whether it be a lawsuit or harassing phone calls and correspondence. Once the Debtor is discharged, that Debtor will no longer be responsible for his or her dischargeable debts. Dischargeable debts include but are not limited to credit cards, unsecured loans, medical bills, utilities, pay day loans, repossessions and foreclosures with a few exceptions.
Meeting with the Attorney
First, an individual needs to contact an experienced bankruptcy attorney. The individual will meet with that attorney and be required to fill out paperwork outlining the individual’s financial situation. The attorney will then discuss the process of filing bankruptcy, the different types of bankruptcies, and any pitfalls there might be in that individual’s case such as prior bankruptcy cases, non exempt property, excessive income, nondischargeable debt, and jurisdictional issues.
If that individual and the attorney decide that Chapter 7 Bankruptcy is a good option, the individual will be filling out very detailed paperwork for the attorney and completing a Credit Counseling course. The Credit Counseling course has to be completed before the bankruptcy is filed. The individual needs to be sure he or she fills out the paperwork thoroughly being sure to list ALL debts and ALL property. The attorney will also require information on that individual’s income and assets such as pay stubs, tax returns, and tax appraisals on property. Once the paperwork is filled out, the attorney will have his office staff prepare the appropriate documents for filing Chapter 7 Bankruptcy. Those documents consist of the Petition, Schedules, Statement of Financial Affairs, Attorney Disclosure, and Means Test.
After the attorney’s office staff has prepared all the paperwork mentioned above, the attorney will have the individual come back to their office to review the paperwork. After the attorney and the individual have reviewed all the paperwork together, the individual will sign the paperwork. The attorney will then file all the documents electronically with the Bankruptcy Court.
What happens after the bankruptcy is filed
The Court will set the individual (now a Debtor) for a creditor’s meeting and appoint a Trustee and Judge. The Debtor and his or her attorney are required to attend the meeting of creditors. The Trustee conducts the meeting of creditors. The Debtor is required to answer questions concerning his or her debts and assets. The purpose of thiss meeting is for the Trustee and creditors to determine whether or not the Debtor is eligible for Chapter 7 Bankruptcy and whether or not the Debtor has nonexempt property that can be liquidated the pay unsecured creditors. The Trustee will either conclude the meeting or adjourn the meeting to another date if the Trustee needs further documentation.
Before a Debtor can receive their discharge of debt, the Debtor has to complete a Debtor Education class. This class can usually be done on line. Once the Debtor completes that class, the Debtor will receive a certificate to be filed with the Court. If that certificate is not filed with the Court before the date for the Debtor’s discharge, the Debtor will not receive a discharge.
Life After Discharge
A Debtor’s finances and property are no longer under the scrutiny of the Bankruptcy Court once the discharge order is signed by the Court. Once discharged, an individual can start the process of rehabilitating their finances and their life. An individual is given a fresh start to restore their credit rating and are given relief from the constant harassment of creditors.
Bankruptcy is not a financial death sentence. There is light at the end of the bankruptcy tunnel.