Getting Back On Your Feet With Chapter 7

Chapter 7 is one type of bankruptcy available to individuals. It is much faster to resolve than Chapter 13 bankruptcy, but cannot always be used by individuals who are able to pay back some of their debts using personal income. Chapter 7 bankruptcy attempts to repay debt by selling off some of a person’s property (with several exemptions, such as a family car and some personal belongings). Chapter 7 is also called “liquidation”, or a “straight bankruptcy”.

How Does a Chapter 7 Bankruptcy Work?

After the bankruptcy application has been lodged, the court will appoint a trustee to oversee and administer the bankruptcy case. The person filing for bankruptcy is usually able to keep typical household goods and clothing. They may also keep their home and vehicles as long as they do not have more equity in those items than they can exempt. A bankruptcy trustee may allow an individual filing for bankruptcy to keep a vehicle secured by a car lien or a house with an outstanding mortgage. In these cases, that individual must cover all ongoing payments for these items, as well as continuing to pay the insurance.

Read below for a more in-depth look at the Chapter 7 bankruptcy process.

How Long Does a Chapter 7 Bankruptcy Take?

From filing the bankruptcy application to completion, a Chapter 7 bankruptcy usually takes anywhere from four to six months. At the completion of a Chapter 7 bankruptcy, most of the debts are “discharged”, meaning the individual is released from paying any more of the debt that was part of the bankruptcy.

Filing for Chapter 7 bankruptcy can be a long and complex process. Each person’s unique financial situation makes every filing unique. Get in touch with Dowe Law on 510-233-7700 today and let them help you through the bankruptcy process quickly, easily and without fuss.

Depending on the Chapter 7 bankruptcy case, you might lose your credit cards as part of the process.

Here’s a summary of the steps you’ll go through in a normal Chapter 7 bankruptcy case.

  1. Talk with a bankruptcy attorney

    Due to the complexity of bankruptcy cases, it is important to retain a skilled bankruptcy attorney. A licensed bankruptcy attorney will understand how filing for bankruptcy would work in your particular financial circumstances. Your bankruptcy attorney should answer your questions in plain English and explain the alternatives to filing for bankruptcy.

  2. Pre-Filing Counseling Class

    Before filing for bankruptcy, you’ll need to complete a credit counseling session. This is a simple process that can be done on the Internet. You are issued a certificate that must be filed with the court along with your Chapter 7 bankruptcy paperwork.

  3. Filing Your Case

    Once the bankruptcy attorney prepares your documents, you should be given the chance to review, make corrections to, and sign them before actually filing for bankruptcy. These 50 to 70 pages of documents consist mainly of a list of your monthly income and expenses, a list of your property and possessions along with values, and names and addresses of your creditors. It is essential to have an experienced bankruptcy attorney to ensure that these documents are prepared properly.

  4. Creditors Stopped – Dead in Their Tracks

    The moment your Chapter 7 bankruptcy case is filed, the court issues what is called the “automatic stay.” This is a mandatory order from a federal court that forbids creditor harassment, wage garnishment actions, car repossessions, lawsuits, and IRS tax liens. This powerful order means that your creditors are prohibited from even calling you or writing to you.

  5. The Meeting of Creditors

    Several days after filing for bankruptcy, you’ll receive a notice from the court that also contains a date and time for the required meeting of creditors, also called the 341 hearing. You’ll attend this mandatory meeting about 35 days after filing for bankruptcy. You’ll need to bring your state-issued identification and social security card.

    The purpose of this meeting of creditors is to give your creditors a chance to ask questions. Don’t worry! Your bankruptcy attorney will be with you. You will be thoroughly prepared for this important meeting with the trustee and creditors who may appear.

    At the meeting, the bankruptcy trustee asks you to verify that all the information in the court papers is correct. The trustee may also ask you questions about particular items on your petition such as income or assets. It normally takes about five minutes.

  6. Financial Management Class

    After filing for bankruptcy, you’ll need to complete a financial management course in order to be eligible for a discharge. The purpose of this financial management class is to teach you how to handle your income more wisely in the future. The certificate you receive upon completion must also be filed with the court. As with the pre-filing class, you may take it online.

  7. How Long Your Case Takes To Complete

    In a Chapter 7 bankruptcy, nothing else normally happens until 60 days later, when the court declares the case final and discharges your debts. This “Discharge of Debtor” is the court order which officially relieves you of any obligation to pay the bills included in your filing.

What our clients say

“Having to file for bankruptcy can be embarrassing and uncomfortable. Ms. Dowe will never make you feel embarrassed about your situation and always gives you a straight answer. Having her as my attorney during this process was a life saver. She and her staff were always courteous and knowledgeable. Ms. Dowe is an excellent attorney and will be with you for every step of the process. You don’t want to go through this alone!” – Carmen