Process of Filing
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
Prepare the Chapter 7 Bankruptcy Petition
File your Chapter 7 Bankruptcy Petition
Attend the Meeting of Creditors
Immediately Following the Meeting of Creditors
Liquidation of Property
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.