Filing For Chapter 7 Bankruptcy

Obtain the court approved forms you will need to file with the United States Bankruptcy Court. You will also be charged a fee. Under some circumstances, if you cannot afford to pay the fee in full at the time of filing, you can ask the court for permission to pay in installments after the petition has been filed.

List:

  • What you own
  • What you owe
  • Income
  • Expenses

Write a statement of:

  • Your financial affairs
  • A statement of what you intend to do with the property you used as collateral to secure consumer debts.

The bankruptcy court will then set a date, time and place for a hearing that is called the Section 341 'meeting of creditors.' You must attend this meeting and answer questions under oath by the trustee and any creditors who appear. The questions are about your financial affairs, including your property, past earnings, and the schedules you have filed. Your case may be dismissed if you fail to attend this meeting as scheduled.

Meeting with your creditors

It is the duty of the trustee, as a representative of your creditors, to determine whether you have listed all your assets, and whether there is some reason why he or she should ask the bankruptcy judge to deny your discharge. It is also the trustee's duty to take possession and sell any of your non-exempt property, to examine claims creditors may file and determine whether they are proper, and to distribute any proceeds of that property among your creditors.

Exemptions

Property that may be exempt if the value of each is within certain limits, and you have taken proper steps to claim the exemption:

  • Working tools
  • Some life insurance
  • Household furnishings
  • Radio
  • One television
  • Musical instruments
  • Some bank accounts
  • Automobile

Some of your property will be exempt only if you arrange your affairs before you file bankruptcy. An attorney can give you legal advice concerning your exemptions. You must request exemptions if you want to receive them.

If you have pledged property to a creditor to secure a debt, then you must usually either pay for the property or give it back to the creditor. This is true even if the property is exempt. You may have to attend another hearing after you receive your discharge if you have worked out a deal with a secured creditor to keep some property.

Discharge

If all of your assets are exempt, and no one objects to your discharge, you will receive your discharge from the debts about 90 days after the meeting of creditors. You will not be discharged from debts such as child support or student loans. You are required to do everything necessary to assist the trustee in collecting your nonexempt assets. You may have to make further court appearances at the trustee's request. If anyone objects to your discharge, or if a creditor objects to your discharge from any particular debt, you will have to appear in court to defend your position. In the majority of cases, these issues do not come up.

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