So you’ve considered your options, and decided that the only solution to you financial situation is obtaining chapter 7 bankruptcy protection. What happens now? Below you will find a brief outline of the typical chapter 7 timeline process.
While every bankruptcy case is unique and requires different legal decisions along the way the general steps will be as follows.
1. Provide Your Attorney with Your Information
Once you’ve chosen an attorney to represent your bankruptcy case, you will need to provide documentation regarding your financial situation. It’s important to show all of your income in the preceding six months.
2. Go to Credit Counseling
One of the requirements of bankruptcy is that the petitioner attend credit counseling classes. These classes are for your benefit, and are designed to educate you regarding finances so that you do not wind up in the same situation again.
3. Petition Review and Signing
Once your attorney has prepared your petition, you will meet again to review the details of the petition and sign the required documentation.
4. Bankruptcy Petition Filed and Case Number Provided
Within about a week of the signing, your petition will be filed with the bankruptcy court and you will receive your case number. Once you have a case number, you will be required to attend another educational course. This should be done prior to you first bankruptcy court hearing.
5. Automatic Stay Goes into in Effect
One of the protections provided by chapter 7 bankruptcy is the automatic stay. This stops all creditors from making any attempts to collect money from you. They cannot even call you at this point.
6. Notice From Bankruptcy Court
After your bankruptcy petition has been filed with the court, you will receive a notice informing you of your hearing date. Normally the hearing will take place about 30 days after your petition signing.
7. Bankruptcy Court Hearing
You will need to appear before the court for a hearing during which the bankruptcy trustee will ask you a series of questions. Your bankruptcy lawyer will prepare you for these questions and get you ready for the hearing. The hearing itself is relatively short, only ten minutes in many cases.
8. Keeping Property (Reaffirming Debt)
During the court hearing, if there are any debts that you would like to “reaffirm”, meaning you would like to keep the property, you will need to bring this up and sign a reaffirmation agreement. This means you will agree to a repayment schedule with the creditor. Often times a discounted rate will be offered in order to help you with the repayment, such as a car payment.
9. The Bankruptcy Discharge
About two months after you court hearing, you will receive a notice of discharge from the bankruptcy court. At this point, your bankruptcy case is over and you are relieved of all debt, except that which you chose to reaffirm.
No two bankruptcy cases are the same, as no to people have the exact same financial situation. You attorney will walk you through the whole process and explore all your possible options.