Chapter 7 Bankruptcy Overview


Chapter 7 bankruptcy starts with a thorough review and consultation regarding your debt situation. You make a list of your debts, your assets (your home, cars, personal items, etc.) and provide information regarding your income.

You will have to qualify by taking the “means test”. If you make too much income you can still file a Chapter 13 case. If you qualify for Chapter 7 bankruptcy and decide to go forward, a petition is prepared which discloses all of your financial information in an easy to read format. You will have to do some “credit counseling” before you can file the case. After that, that petition gets filed with the Bankruptcy Court. At this point, your creditors are generally barred from taking any further collection action without permission from the court.

Your case gets assigned to a Bankruptcy Trustee who reviews your bankruptcy petition and schedules. You attend a meeting with the Trustee which your attorney attends also. The meeting is to review the bankruptcy petition. If the Trustee is satisfied that you have no assets to administer and your bankruptcy petition is in order he will file a “no asset report”.

After the meeting with the Trustee you will complete the second part of the “credit counseling” which is about debtor education. Sixty days after the meeting with the Trustee, your case should be scheduled for discharge which you will receive by mail from the court.

If you have secured debts like a car or house loan, you will have to decide whether you will keep them after the bankruptcy. If you keep them you have to pay for them and enter into a reaffirmation agreement with the lender. That agreement usually states that the debt survives bankruptcy and must be paid.

Sometimes issues of dischargeability of your debts arise. Certain debts cannot be discharged, such as student loans. It is important to fully disclose all of your debts to your attorney, so that you can get the proper advice.

Contact Attorney Alex Ranjha today for your free consultation.