CHAPTER 7 BASICS
CHAPTER 7 – OFFERING FINANCIAL RELIEF AND A DEBT-FREE FUTURE
Every year, millions of Americans find themselves in some sort of a financial crisis. Of those, hundreds of thousands find relief after filing Chapter 7 bankruptcy. The Law Offices of SavedMe.com wishes to assist by evaluating your situation and discovering if Chapter 7 can help you.
What is Chapter 7?
The Bankruptcy Reform Act (or Chapter 7) was designed for those who are severely burdened by debt without the possibility or resources to pay a significant portion of their debt back. Chapter 7 bankruptcy is perfect for someone who is overwhelmed by unsecured debt. Medical bills, utility bills, overdraft charges, fees, bad checks, and balances on foreclosures and repossessions can be wiped completely away. Student loans and taxes are not as easily dismissed and cases where they have been are few and far between. It is important to consult with a bankruptcy attorney in every case, especially if student loans and taxes are involved.
Chapter 7 is the simplest and quickest form of bankruptcy. It is available to individuals, married couples, partnerships, and corporations. Often being synonymous with liquidation, the truth is, in most cases assets tend to fall under exempt, rather than non-exempt, and leave nothing to be liquidated. Another benefit of Chapter 7 is that the “automatic stay” goes into effect once the petition is filed creating a legal barrier between you and your creditors, keeping them from taking further actions to “collect.” This action alone can help to decrease your stress levels immensely, as we all know how determined harassing creditor can become.
Debts that are not dischargeable by Chapter 7:
- Debts incurred through fraud, such as lying about your income on a credit application
- Child and spousal support
- Debts incurred as a property settlement in a divorce
- Most taxes
- Most student loans
- Debts you forgot to list on your bankruptcy papers
- Debts for personal injury and death caused by your driving a motor vehicle while intoxicated
- Debts you never intended to pay back (you took on the debt near in time to filing bankruptcy, you took a cash advance and never paid any money back, debt taken on after meeting with a bankruptcy attorney)
- Debts for personal injury and property damage incurred through willful or malicious harm
- Criminal fines and penalties.
It is important to understand that the law is constantly changing where bankruptcy is concerned and The Law Offices of SavedMe.com attorneys cannot guarantee that any single debt can be forgiven. And it is because of this constant change that a consultation with an experienced bankruptcy attorney is imperative.
Filing Chapter 7 Bankruptcy – Where do I begin? What happens next?
Eligibility to file Chapter 7 is determined by a means test which a The Law Offices of SavedMe.com attorney will explain to you in detail once you contact us. This step applies only to individuals whose debt is primarily consumer debt.
During your initial consultation, an attorney from The Law Offices of SavedMe.com will present you with a list of documents that you will need to provide so that we can prepare your bankruptcy petition and schedules. At this time, The Law Offices of SavedMe.com will also provide you with an intake form. When you have completed and compiled the necessary forms and documents, you will again meet with your bankruptcy attorney.
When attending your initial consultation, your The Law Offices of SavedMe.com attorney will need you to bring the following:
- A complete list of your creditors – everyone you owe money too, even those you intend to pay back. See intake form link below
- A complete list of your assets, including everything you own — even if it was given to you
- A recent pay stub from each of your places of employment
- W-2′s or tax returns from the previous tax year
*See Chapter 7 Checklist
Attend Credit Counseling
Next, you will need to attend credit counseling in order to obtain a credit counseling certificate. Your The Law Offices of SavedMe.com attorney will be preparing your court papers in the meantime. Once all documents are collected and forms are completed, you will meet with your attorney again in order to completely review your bankruptcy petition and schedules before signing.
Statement of Financial Affairs
You will also be asked to list all of your assets and all of your debts and provide a brief recent financial history. The statement of financial affairs is the most time consuming, yet most important part of the bankruptcy process.
Filing Your Petition with Bankruptcy Court
Your case begins once the petition is filed. The Law Offices of SavedMe.com will file your petition electronically with the bankruptcy court. After filing, an “automatic stay” is put in place to put a halt on collections, further easing the stressful situation and barring harassing creditors from pushy collection tactics. You will also receive your bankruptcy case number, so that if you do receive calls or bills from collection agencies you can provide them your case number and also give them the The Law Offices of SavedMe.com phone number. All collectors will have to deal directly with our office once your petition is filed. If any creditors are garnishing your wages, repossessing your property, or foreclosing on your home, please contact your The Law Offices of SavedMe.com attorney so that we may notify them of your bankruptcy case.
Financial Management Course
After we have filed your case, you will need to attend The Financial Management Course approved by the U.S. Trustee’s office www.usdoj.gov/ust. Present the certificate to your Law Offices of SavedMe.com attorney at the meeting with the creditors.
Meeting with the Creditors
Approximately 30 days after filing your bankruptcy case, you and your The Law Offices of SavedMe.com attorney will attend a hearing called a 341 Meeting with the Creditors. This is an opportunity for creditors to meet with you and ask questions; however, most of the time creditors choose not to attend. At this meeting, a Trustee who is appointed to your case will interview you for approximately 5-10 minutes and ask some basic questions about your case. This meeting is mandatory and you will be asked to bring the following documents:
- Current Photo Identification
- Social Security Card
- Recent statements for all financial accounts
- Pay stub(s) received immediately after filing for bankruptcy
As stated before, your The Law Offices of SavedMe.com attorney will be at your side throughout this meeting
After the meeting, your creditor and Trustee will be allowed time to review and possibly object to various aspects of your petition and schedules. All objections are due within 60 days prior to the Meeting with the Creditors. And while objections are usually rare, they do occur from time to time. However, your The Law Offices of SavedMe.com attorney will assist you in carefully preparing your petition and schedules so that unnecessary objections are avoided.
If no objections are filed against your case, then you should receive a discharge shortly after the 60-day waiting period.
Post-Discharge Asset Administration
In some bankruptcy cases involving non-exempt assets, these assets must be turned over to the bankruptcy estate. These bankruptcy cases may remain open until all the assets are received and distributed.