Filing a Chapter 7 Bankruptcy: A Step-by-Step Guide
Posted by Alan Finkel on November 24th, 2022
Chapter 7 bankruptcy gives you a "second chance" to regain control of your finances by legally discharging the majority of your unsecured debt, such as credit card debt, medical bills, and personal loans. Finding an experienced bankruptcy attorney is critical to your Chapter 7 bankruptcy success. You can refer creditors to your lawyer's office once you decide. The filing of the petition results in an "automatic stay," which means creditors cannot sue you, garnish your wages, or contact you about your debts.
Don't just believe us. We advise anyone considering Chapter 7 bankruptcy to speak with an attorney about the implications of filing for bankruptcy. On a person's credit rating and potential future access to credit, bankruptcy may have a long-term impact.
Here's a possible schedule:
1. The process begins with the debtor completing a series of forms outlining assets, liabilities, income, expenses, overall financial standing, and any existing contracts or leases in the debtor's name.
2. Credit counseling before bankruptcy Certified counselors examine the debtor's financial situation to determine if there are other, less drastic solutions, such as debt management, debt consolidation, or debt settlement, typically conducted by nonprofit credit counseling agencies.
3. If bankruptcy is the best option, you or your attorney must file a petition for bankruptcy at the local bankruptcy court using the forms you completed in Step 1.
4. After filing your case, the court appoints a trustee to verify your submitted documents. To ensure the accuracy of your documents, the trustee will request copies of bank statements, paycheck stubs, tax returns, and so on.
5. The trustee and creditors will meet next if any creditors decide to pursue the debts you are attempting to discharge. You must respond if the trustee (or possibly the creditors) has questions about some of your documents.
6. The trustee has 30 days to object to any property the debtor wishes to keep. Other creditors have 90 days after the meeting to file a lawsuit claiming their debt should not be discharged in bankruptcy. The trustee may rule that the Chapter 7 case should have been filed as a Chapter 13.
7. The next step is to ensure that any promises you made about secured debt - usually a home or car, but sometimes a personal loan - were kept.
8. Then comes a second counseling session called "debtor education," in which nonprofit credit counseling agencies present lessons on debt management and other personal finances.
9. The goal of debtor education is to assist you in making the most of your fresh start. One bankruptcy is enough for a lifetime unless you're a high-stakes real estate developer.
10. If everything goes well - the judge will discharge your qualified debts, removing your legal obligation to repay your creditors.
Once completed, your financial situation will appear to be chaos, which it is, at least temporarily. However, without debts, you can begin the road to recovery. Preliminary steps include creating a budget and applying for a secured credit card. An experienced attorney regarding Debt Settlement in California State is here to guide you step by step according to your specific case.
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About the AuthorAlan Finkel
Joined: August 16th, 2022
Articles Posted: 29
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