Chapter Seven Bankruptcy Information
There are two alternatives for filing bankruptcy as a single person or married couple, chapter 7 and chapter 13 bankruptcy. Chapter 7 is often referred to as liquidation as all of your property that is not exempt is sold in order to pay off your debts that you claim in the bankruptcy. Exempt property is that property that the government allows you to keep in order to continue living a normal life, like a car, clothing, furniture, etc. Each state has their own bankruptcy exemptions, as well as the Federal bankruptcy exemptions that can be used in some states.In order to qualify to file a chapter 7 bankruptcy petition, you must be an individual, you must take a credit counseling course from an licensed agency inside the 180 days before filing for chapter 7 bankruptcy relief, and pass the means test which is filed with your petition.In a chapter 7 petition, you will have to file schedules that list your creditors, assets, earnings and living expenses. The bankruptcy court may also request to see tax returns, pay stubs and credit counseling certificate. Bankruptcy filers who are married must provide the spouses data even if they are not going to be filing bankruptcy together so the court can determine the households ability to pay the debts.When finishing your petition, you will have the option to continue paying and holding onto your property if you are able to, such as your dwelling or auto, by making a reaffirmation agreement with the creditor. By reaffirming the debt you are recognizing that you intend to make payments. If the trustee approves your reaffirmation agreement, the creditor may be able to repossess the property if you do not pay.When you file your chapter 7 bankruptcy document you will have to pay a filing fee of $299. This cost can be paid in installments, up to 4 no later than 120 days after you file. Once you file, the bankruptcy stay is in effect, and your creditors cannot try to collect on the debts or continue lawsuits, or wage garnishments. Each of your debts will be given notice that you have filed bankruptcy and yielded a chance to respond. A meeting of the creditors, a 341 meeting, will be called within 20-40 days of filing the petition. During this group meeting, the trustee and your creditors may ask questions about your petition.The trustee then rules on the presumption of abuse of your case. If the trustee finds a presumption of abuse you can be forced to file ch 13 instead.The trustee then liquidates your assets if any are not exempt and gives the profits to creditors. After liquidation a discharge is granted to you, which wipes out the rest of your debts.
