Chapter 7 Bankruptcy: What Is It?
Many people who are considering filing bankruptcy want to know exactly what a Chapter 7 bankruptcy entails. This is the most common type of bankruptcy that is filed throughout the country. It helps people eliminate their debts forever and obtain a “fresh start”.
How Do You Prepare for a Chapter 7 Bankruptcy?
Before you file for Chapter 7 bankruptcy relief, the Chapter 7, we will need to gather all pertinent information together to help complete the schedules, petition and various other documents. Make sure to bring your bank statements, loan documents, credit card statements, pay stubs and other pertinent financial records for the Chapter 7 bankruptcy attorney. The Chapter 7 Bankruptcy Lawyer will need to have proof of everything that you are putting into your petition. When you have everything on hand, it will help the Chapter 7 Bankruptcy Attorney file the paperwork efficiently and quickly.
Completing the Bankruptcy Paperwork
When you make the decision to file for relief from a Chapter 7 bankruptcy, your Chapter 7 Bankruptcy Lawyer will end up completing a number of various documents. The documents entail a petition for relief, declarations about your education, schedules for your liabilities and assets and your statement of financial affairs. All of these documents are going to require that you open your financial life up to the courts, which includes providing a detailed listing of your creditors, debts, property, income, property transfers and expenses. Once the Chapter 7 Bankruptcy Attorney has completed all of the necessary documents, they will need to be filed with the appropriate court and a filing fee will need to be paid.
Conducting the Means Test
Before being able to file for bankruptcy relief, the Chapter 7 Bankruptcy Attorney will complete a means test to determine your eligibility. This test provides the court with the necessary information to determine whether based upon your family income and expenses whether you can qualify for a Chapter 7. It takes an average of your income over the previous six months and compares that amount with the standard income for where you live. It also includes your secured debts as a means of determining whether you are able to afford paying for all of your debts. For those who fail to pass the means test, there are specialized exceptions that allow you to still file for relief under Chapter 7. Since the beginning of the means test, many people have criticized its usage, however most people we have seen still qualify for a Chapter 7 Bankruptcy.
Meeting of the Creditors
After the Chapter 7 Bankruptcy Lawyer files your petition and documents, you will have a Meeting of the Creditors. We will prepare you for this meeting. All of your creditors will be notified about this meeting. You will be asked a series of questions at this meeting. Most of the time, the meeting is concluded on that first date. Creditors can appear and ask any questions that they choose.
Discharging the Debts
As long as no one objects to the discharge, the court will give the debtor the discharge requested. Debtors have 60 days to file a complaint. If no complaints are filed, the discharge is granted a few days later. It prevents any creditor from trying to come after you for any debts that arose before the proceedings occurred. Certain debts are not dischargeable, so make sure to speak with the Chapter 7 Bankruptcy Lawyer about that beforehand.