Bankruptcy happens to people from all walks of life, and deciding to file is often a difficult decision. If this is something you are considering, read on to learn about filing for Chapter 7.
What is Chapter 7?
This is also called “straight” or “liquidation” bankruptcy and means that the trustee will cancel most if not all of your debts. During this time, the trustee may sell some of your property to repay your creditors.
As long as you have not received a bankruptcy discharge in the last six to eight years and your income is at or below the median income for a household of your size in the state you live, Chapter 7 could be an option for you.
- In order to file, you will need to fill out a petition and other forms that your attorney will file with the court. You will be asked to describe,:
- All monthly expenses
- All debts
- Any property you sold during the last two years
- Any property that you believe the law lets you keep despite the bankruptcy process. This is known as exempt property, and usually you can keep some home equity, and items such as furnishings, clothing, and car.
The court will appoint a trustee that will be responsible for making sure your creditors are paid to the fullest extent.
Within two weeks of filing, you and all of your named creditors will be given notice of a creditors meeting. The trustee is in charge of the meeting, and once you are sworn in, you may be required to answer questions regarding your filing.
After the meeting, the trustee may decide you have non-exempt property. If this happens, you could have to turn over the property or give the trustee the property’s value in cash.
After the bankruptcy process is complete, the court will discharge your debts except:
- Those that automatically survive bankruptcy such as child support or student loans
- Any debts that are ruled non-dischargeable due to creditor objection
This is just some of what is involved when filing for Chapter 7 bankruptcy. If you would like to learn more, contact us. Our knowledgeable attorneys will help determine if it is right for you.