Chapter 7 Bankruptcy - Quick Debt Relief
The basic idea in a chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for your giving up property, except for "exempt" property that the law allows you to keep. In many cases, all of your property will be exempt. Any property that is not exempt is sold, with the money distributed to creditors.
Chapter 7 is by far the most common type of Bankruptcy filing because it allows people who are over their head in unsecured debt - like credit cards, medical bills and personal loans - to get rid of this debt so that they can get their life back. This is called the "fresh start", and getting this fresh start is still very possible - even after the "Bankruptcy Reform" that took place in 2005.
How Does Chapter 7 Bankruptcy Work?
Assembling the Documents
Filing a Chapter 7 Case requires a lot of teamwork between the lawyer and you, as the client. The first step is for you to assemble all of your financial documentation. I would need you to get the following documents:
- 2 (two) years Federal Tax Returns or transcripts from the IRS.
- 6 (six) months Payroll Stubs for each employed person including a non-filing spouse
- Current mortgage statement (if applicable)
- Registrations for each vehicle and the last statement for each vehicle payment
- Last 2 (two) statements from each utility and cell phone
- Last 4 (four) months statements for each credit card
- 6 (six) months Bank Statements for each Financial Account
- Your last statement for any IRA, 401K or medical savings plan
- Homeowners or Renter’s Insurance Policy Declaration Page
- Driver’s License, State ID, or Passport (Must be current and valid)
- Social Security Card
- Copies of the summons and Complaint from any lawsuit on going or filed by or against you or your spouse in the last two years
- Any Divorce or Separation Agreements (if applicable)
- 6 (Six) months evidence of payment of Domestic Support Obligations
That's most of the work that you will have to do. Leave the rest to me!
Once I have these documents we will go through a structured financial interview. During this process we will cover every aspect of your finances and help you develop a budget for moving forward.
After the interview is complete, I will set you up with a Credit Counseling session. Credit Counseling must be completed within 180 days of a Bankruptcy filing. Don't worry, the Credit Counseling sessions are done online - I will e-mail you a link to the site with information on how to log in. The sessions usually take 2 hours or less, and then you are done!
Filing the Case
Once Credit Counseling is complete, we will sign the documentation. Then the Bankruptcy Petition, Schedules, Statement of Financial Affairs, Means Test calculation and other documents are filed with the Court.
The Creditors Meeting
Upon the filing of the case a Creditors Meeting is scheduled. You will be required to attend a Creditors Meeting. It's ironic, but you almost never see actual creditors at the Creditors Meeting! Most of the time, this meeting will be a short and simple procedure where you are asked a few questions about your bankruptcy forms and your financial situation. The Meeting is held by a Chapter 7 Trustee, who is usually a private attorney who is experienced in Bankruptcy Law and is on the standing panel of Trustees. The focus of the Creditors Meeting is whether you have any assets that are not protected by exemptions. I will be with you every step of the way, and in most cases we have provided the Chapter 7 Trustee with enough information in advance of the meeting to establish that you are entitled to the exemptions that you claim.
The Financial Management Session
After the Creditors Meeting I will set you up with a Financial Management course. The Financial Management Course must be completed in order for you to get a discharge. This course is handled just like the Credit Counseling - I will e-mail you a link to the site with information on how to log in. The sessions usually take about 2 hours.
After you complete the Financial Management course, we wait for your discharge to be processed. In most cases you will receive your discharge about 10 weeks after the Creditors Meeting!
I have helped hundreds of people just like you get their Chapter 7 Discharge and the fresh financial start that comes with it.