Filing Chapter 7: What is the Process?

The chapter 7 process starts before individuals decide to file for bankruptcy. However the chapter 7 process usually takes from three to six months. When people file for chapter 7 bankruptcy they want to eliminate their unsecured debts like credit card and medical bills without repaying creditors.

People Must Be Eligible for Chapter 7

The U.S. Bankruptcy Court has a means test which indicates who can file for bankruptcy. When individuals pass the means test they don’t have enough more to repay their debts and qualify for chapter 13. Thus, they become eligible to file for chapter 7 bankruptcy. Individuals can find out if they are eligible for chapter 7 by comparing their income—after monthly debts like utilities and rent are paid—against their state’s median income for their household size.

Chapter 7 Process: Starts 180 within Filing for Bankruptcy

People planning to file bankruptcy, more specifically chapter 7, must complete pre-bankruptcy credit counseling. The credit counseling consists of a one session which last 60 to 90 minutes. Individuals work with credit counselors who review their finances and may offer debt management options other than bankruptcy. Depending on where people live, the pre-bankruptcy counseling session cost about $50.

File Chapter 7

Once bankruptcy cases are filed, an automatic stay begins. An automatic stay means that creditors are not allowed to start or continue any legal proceedings such as lawsuits and wage garnishments. Of course, to file chapter bankruptcy 7 cases requires paying fees. These fees can be paid at once or in installments.

Meeting with Creditors

Individuals are required to attend at least one court proceeding called the meeting of the creditors. During the meeting, a bankruptcy trustee reviews chapter 7 bankruptcy paperwork and asks individuals questions. Typically, creditors are allowed to attend the meeting and ask questions or object to the bankruptcy cases.

People Must Attend Post-filing Debtor Education Course

Before any bankruptcy can be successful discharged, people must attend another credit counseling session. In the session people will learn money management techniques and develop financial budgets. The session, depending on the credit counseling organization, cost from $50 to 100.

Bankruptcy Cases Are Discharged

Once bankruptcy cases are discharged people’s unsecured debts are eliminated.

Obtain Legal Help with the Chapter 7 Process

Experienced bankruptcy attorneys can help people with every step of the chapter 7 process. Also, the attorneys can help find the appropriate credit counseling organizations for people to use.