Chapter 7

Most Chapter 7 bankruptcy cases are brief, taking about four to six months to complete. Although Chapter 7 filers rarely appear in front of a judge, the process requires one mandatory appearance before the Chapter trustee appointed to oversee the case.

A successful Chapter 7 case ends with a discharge of qualifying debt, including, personal loans and credit card debt. When a debtor receives their discharge, he/she are no longer required to pay the debt!  Below are my 12 steps to successfully complete a Chapter 7 case:

1. Initial Free Consultation: The first thing you need to do is take a deep breath, and call attorney Alex Sanders to schedule a free consultation.  At the consultation, we will ask some basic questions to get a general overview of your financial situation and decide the best solution.  For a consumer, this is usually Chapter 7 or Chapter 13.  
2. Pre-bankruptcy information/document gathering: Set aside some time to make a list of your debts, including mortgage statements, auto loans, credit cards, medical bills, paystubs, tax returns, etc.  Do not worry if you cannot locate all the bills.  Your attorney should have a method to find any missing debts.  If you are organized prior to meeting with your attorney, the filing process should go fast and efficiently. You will also need to take a credit counseling course to earn a credit counseling certificate. This course costs approximately $20 and must be taken from an approved credit counseling agent. It must also be taken within 6 months before the bankruptcy filing. In most cases, the course takes 30 minutes to an hour online or by phone. You’ll file your completion certificate along with your bankruptcy paperwork.

3. 2nd Appointment:You will meet with either an attorney or paralegal and produce all pertinent documents (mortgage statements, auto loans, credit cards, medical bills, etc.) so that our staff can prepare your petition and schedules through our Bankruptcy software.  You must disclose all aspects of your finances, including your income, debt, property, and property transfers going back as many as ten years, in the official bankruptcy forms.  Our staff will help you obtain a credit report to ensure all debts are included in the schedules. 
4. Signing and Filing of Case:It typically takes an attorney and staff approximately one week to review and enter the client’s personal information, assets, debts, income, and other relevant financial information.  I personally meet with all my clients to review and explain every aspect of the case prior to filing, to make sure the information is accurate and to ensure the client knows exactly what to expect.  After all the pertinent documents are signed, the attorney or paralegal will file the case electronically using our bankruptcy software.  Once you file your bankruptcy petition, an order—called the automatic stay—is automatically put into place. The automatic stay prohibits most of your creditors from continuing collection actions against you. 
5. The meeting of creditors: Every filer must attend one meeting of creditors, also known as the 341 meeting. The bankruptcy trustee conducts the meeting. You can expect the trustee to verify your identity and ask you questions about your petition and finances. Creditors can, but often don’t, appear to ask questions.  I generally meet with my clients 20 minutes prior to the hearing to review all questions the Trustee might ask.  The creditors’ meeting typically takes 10 to 30 minutes.
6. Property: If your property is exempt, you’ll be able to keep it. The trustee will sell assets you can’t protect with a bankruptcy exemption for your creditors. If the trustee receives little after selling the property, the trustee might abandon it. 
7. Secured debts: You must decide what to do about your secured debts for which you pledged property as collateral—such as your mortgage or car loan. Typically, you can surrender the property, reaffirm (pay for in installment per the original loan) the property or redeem the loan (pay for outright, usually at a reduced amount).  Here’s what you must do to keep the collateral: be current on your payment, exempt all property equity and continue making the payment after bankruptcy. Otherwise, the lender will be able to foreclose or repossess the property.
8. Financial management course:A filer must complete a debtor’s education course in addition to the credit counseling received before filing for bankruptcy. Debtors must submit the certificate of completion before receiving a discharge.  This can be done by phone or online and costs approximately $25.
9. The bankruptcy discharge: After completing the requirements above, the court will grant a bankruptcy discharge, and the automatic stay will end. The discharge will not state which of the filer’s debts get wiped out. Instead, it will list the types of debt that survive bankruptcy such as domestic support obligations, recently acquired tax obligations and student loan debt.
10. Case closed:The court will close the case shortly after issuing the discharge order. However, your case could remain open if the trustee hasn’t distributed all nonexempt assets or if your case is involved in litigation.  
    
    

If you file a case with Alex D. Sanders Law, we will be with you throughout the whole process and available after the case is closed for any of your needs.  Give us a call today if you are interested in a fresh start.