The Chapter 7 Bankruptcy Process
All Chapter 7 Bankruptcy cases follow a standard process. A majority of the work related to your Chapter 7 Bankruptcy will be completed prior to the actual filing of your case. We work with you to complete the Chapter 7 Bankruptcy petition. The Chapter 7 Bankruptcy petition requires you to list your assets, debts, income, expenses and your recent financial transactions. The Chapter 7 Bankruptcy petition, once completed, will reflect your current financial condition as well as specify what transactions have taken place in past three years. Once filed, the Chapter 7 Bankruptcy Trustee commences his management and oversight of your Chapter 7 Bankruptcy estate. Within thirty to forty-five days after the filing of your Chapter 7 Bankruptcy petition you will attend the meeting of creditors which is a brief hearing presided over by the Chapter 7 Bankruptcy Trustee. Your Chapter 7 Bankruptcy discharge is entered approximately four months from the date the case was filed and your case is formally closed shortly thereafter.
Below are some of the key steps in your Chapter 7 Bankruptcy:
Mandatory Credit Counseling
Every Chapter 7 Bankruptcy filer must take a credit counseling class in the six months prior to filing the Chapter 7 Bankruptcy petition. You must use an agency that has been approved by the United States Trustee's Office. We recommend www.a247class.com as an approved online credit counseling agency.
Prepare the Chapter 7 Bankruptcy Petition
Prepare your Chapter 7 Bankruptcy Petition: Our office will work with you in preparing your Chapter 7 Bankruptcy Petition, including all required schedules and attachments and the Chapter 7 Means Test. This will require you to provide our office with extensive paperwork on all of your assets and debts. This process may take one or more meetings with us in our office.
File your Chapter 7 Bankruptcy Petition
Your Chapter 7 Bankruptcy Petition will be filed online and our office will have confirmation that it has been accepted and filed with the Chapter 7 Bankruptcy Court immediately. Immediately upon filing, your Chapter 7 Bankruptcy case is assigned a case number. That case number can then be provided to creditors as confirmation that the case has been filed and that you are now protected by the Chapter 7 Bankruptcy automatic stay. All creditors are compelled to cease all collection attempts. This includes any active foreclosure proceedings, garnishments, lawsuits and collection calls to your home or place of employment. The Chapter 7 Bankruptcy automatic stay remains in effect until your Chapter 7 Bankruptcy case is closed. Additionally, we will receive notice of your court hearing time, date and location.
Attend the Meeting of Creditors
Every Chapter 7 Bankruptcy filer must attend a hearing called the Meeting of Creditors or, alternatively called the 341 Meeting. This hearing is presided over by the Chapter 7 Bankruptcy Trustee assigned to oversee your case. The Chapter 7 Bankruptcy Trustee will ask you a series of questions under oath about your Chapter 7 Bankruptcy Petition and related documents. This is also an opportunity for any of your creditors to ask questions related to their account and your finances. It is uncommon for creditors to appear at this hearing. This hearing typically lasts between five and ten minutes, although you may spend substantially more time in the courtroom waiting for you case to be called.
Immediately Following the Meeting of Creditors
Within a few days of your Meeting of Creditors we will receive communication from the Chapter 7 Bankruptcy Trustee. In most cases, that communication confirms that you are eligible for a Chapter 7 Bankruptcy Discharge and further states that the Trustee is surrendering his right to liquidate any of your property. In some cases, the Trustee may request further information such as paperwork supporting your valuation of your assets.
Liquidation of Property
In the event that the Chapter 7 Bankruptcy Trustee indicates that they may consider liquidating some of your property you must comply and provide them with additional information as requested. In the event that the Chapter 7 Bankruptcy Trustee ultimately determines to liquidate an asset, you may be able to negotiate with the Chapter 7 Bankruptcy Trustee to keep certain nonexempt property. Often, the Chapter 7 Bankruptcy Trustee will negotiate and take a cash payment from you in lieu of selling the asset. If you unable to successfully negotiate with the Chapter 7 Bankruptcy Trustee
Execute Reaffirmation Agreements on Secured Debt
In regard to secured debt, the Chapter 7 Bankruptcy filer typically (1) surrenders the collateral; or (2) reaffirms the secured debt. A Chapter 7 Bankruptcy Reaffirmation Agreement reaffirms the Chapter 7 Bankruptcy filer's responsibility on the debt and reaffirms the creditor's security interest in the subject property. A Reaffirmation Agreement is a contract between the Chapter 7 Bankruptcy filer and the creditor. By signing the reaffirmation agreement, the Chapter 7 Bankruptcy filer waives the Chapter 7 Bankruptcy discharge with respect to a particular debt. A Reaffirmation Agreement restores the debtor's personal liability on the debt. Additionally, the Chapter 7 Bankruptcy filer that signs a Chapter 7 Bankruptcy must continue making the monthly payments and will remain personally liable on the reaffirmed debt if they fail to make the required payments. The reaffirmed debt will be completely unaffected by the bankruptcy filing as if the bankruptcy had occurred. Additionally, the creditor retains all of its rights to repossess or foreclose on the property securing the debt. In the event that the Chapter 7 Bankruptcy filer fails to make the required payments after signing a Reaffirmation Agreement, the creditor can repossess or foreclose the subject property and holder the Chapter 7 Bankruptcy filer personally responsible for any deficiency.
If after careful consideration, you determine you can afford to continue making the monthly payment on the secured debt then you should consider signing the Reaffirmation Agreement. The primary reason to do so is to ensure that your timely payments are reported to the credit reporting agencies. Many secured creditors fail to report timely payments if a Reaffirmation Agreement is not filed with the Court. Likewise, many creditors will refuse to send billing statements or allow online payments in the absence of a Chapter 7 Bankruptcy.
Take the second Credit Counseling Class
Every Chapter 7 Bankruptcy filer must take a second credit counseling class after the Chapter Bankruptcy Petition is filed but before the Chapter 7 Bankruptcy Discharge is entered. You must use an agency that has been approved by the United States Trustee's Office. We recommend www.a247class.com as an approved online credit counseling agency.
Receive your Chapter 7 Bankruptcy Discharge
You will receive your Chapter 7 Bankruptcy discharge from the Court approximately four months from the date the case is filed. Entry of the Chapter 7 Bankruptcy Discharge does not completely close your file. Your file is only completely closed after the Chapter 7 Bankruptcy Court enters an order directing that the case be closed. Many Chapter 7 Bankruptcy filers make the mistake of believing that the Discharge fully completes their case. Your case remains open and you must comply with any additional requests from the Chapter 7 Bankruptcy Trustee. Also, until your Chapter 7 Bankruptcy is closed, you must report any significant events, such as receipt of an inheritance or winning the lottery, to the Chapter 7 Bankruptcy Trustee.
Your Chapter 7 Bankruptcy will be formally closed a few weeks after your Chapter 7 Bankruptcy Discharge is granted. At that time, your Chapter 7 Bankruptcy case will be officially closed, you are no longer subject to additional requests from the Chapter 7 Bankruptcy Trustee and you will no longer be liable to most or all of your creditors.