The Chapter 7 Bankruptcy Process
Once it is determined that you qualify for Chapter 7, you will be required to provide your bankruptcy attorney with numerous documents evidencing your income and assets. Your attorney will review your documentation and prepare your petition.
After your petition is filed with the Bankruptcy Court, you will be scheduled to appear at a mandatory meeting. This is called the First Meeting of Creditors (which can also be referred to as a 341A Meeting).
At this point you will also begin to benefit from the automatic stay, a court order issued once you formally file. The automatic stay prevents any collections actions from proceeding against you, meaning it can stop foreclosures, repossessions, creditor lawsuits, and wage garnishments. The automatic stay remains in effect until your bankruptcy has concluded.
Although your initial meeting is called a First Meeting of Creditors, it is rare for a creditor to appear. You are required to attend this meeting, or your case will be dismissed. You will be questioned by the Chapter 7 Trustee that was assigned to administer your case. It is this Chapter 7 Trustee’s job to review your petition and to evaluate your case.
The Chapter 7 Trustee will gather and review documentation that is necessary to determine if your case was properly filed and if there are any assets that could be sold for the benefit of your creditors. You must cooperate with the efforts of the Chapter 7 Trustee and provide all requested documentation. Our Howell Chapter 7 bankruptcy attorney will work directly with you to communicate with your Trustee and advocate on your behalf.
After the First Meeting of Creditors is conducted, there is a deadline set for creditors and any other interested parties to object to your bankruptcy discharge. This discharge is the order from the Bankruptcy Court that absolves you of any legal obligation to pay your qualifying debts – a key benefit of filing. That deadline is typically set for 60 days after the meeting.
If a creditor has reason to believe that you have engaged in any wrongdoing (such as fraud, misrepresentation, or another deceptive practice), it must file a complaint to deny you your discharge within the court-set deadline. Once that deadline passes, creditors lose their right to file these types of complaints against you or pursue repayment for discharged debts. This 60-day window is required by United States bankruptcy laws, though no creditors end up objecting in the majority of Chapter 7 cases.
After the deadline has passed for creditors to object to your case and once the Chapter 7 Trustee has determined that there are no assets that can be sold, the Bankruptcy Court will proceed to finish up your case. As soon as the Bankruptcy Court has received the required documentation from the Chapter 7 Trustee, it will issue your Discharge Order and officially close your case. The average Chapter 7 case lasts approximately 4-5 months.
The Discharge Order will absolve you of unsecured debts. This means you will no longer be responsible for paying any credit card debt, medical debt, unpaid utility bills, and personal loans. Secured debts cannot be discharged in a Chapter 7 bankruptcy, and certain other types of debt, like tax debt and student loan debt, have heavy exclusions. We can help you evaluate which of your debts you will be able to discharge before your filing.
Let Us Help You Leverage Chapter 7 Bankruptcy
Many are intimidated by the liquidation process inherent to Chapter 7 bankruptcy. They worry they might lose their home or sentimental and valuable pieces of property. The reality is that if you qualify, you do not likely need to worry about losing much or any of your assets. Generous federal and state exemption schedules allow you to safeguard many of your most treasured and essential assets, and our Howell Chapter 7 bankruptcy lawyer at Fedoroff Firm, LLC can work to reduce or eliminate the process’s negative impact while maximizing its benefits. We will serve as your legal partner and advocate throughout the entirety of your Chapter 7 bankruptcy.