CHAPTER 7 Bankruptcy – Process

21 Dec

CHAPTER 7 Bankruptcy – Process

  1. Step One – Initial Consultation – at the initial consultation we will sit down and go through your financial situation and determine if a bankruptcy would work and what issues might arise if you file a bankruptcy.

  2. Step Two – – $14.95 – In order to file a bankruptcy a debtor must complete a pre-filing course. The court is about 45 minutes long and is usually done on line. They will ask for financial information similar to what I asked at the initial consultation. Afterwards they will provide budget recommendations for your situation. Most of my clients find that the first course is beneficial. IT IS IMPORTANT THAT YOU EITHER CALL OR HAVE A TEXT SESSION with one of their counselors. After the session they will issue a certificate that I file with the bankruptcy.

  3. Step Three – Signing Consultation – bring Tax Return, 2 months paystubs, debts (a debt list with name of creditor, year incurred, and est. amount or the bills), car title (or memorandum title), and life insurance beneficiary info. If being garnished, bring the fax number to your payroll. At this point I also ask for the initial attorney fee. If we have not agreed with an installment plan I would also ask for a court cost payment as well.

  4. Step Four – Case Filed – once the case is filed an automatic stay goes in effect that prevents most creditors from doing collection actions during the bankruptcy.

  5. Step Five – 341 Hearing – bring ID, Social Security Card, and Last Bank Statement. In a Chapter 7 341 hearing a bankruptcy trustee will review your petition and ask you a set of questions similar to what I asked at the signing consultation. They are looking to see if there is anything that they can take, sell, and give to the creditors. In the vast majority of case there is nothing that they can take. However, if there is, you should know this by now because we have done two consultations regarding your case. The hearing typically lasts about 5 minutes. While I cannot guarantee that the process will be pleasant, I can say that I do not have any issues with the fairness of any of the bankruptcy trustees that I have worked with.

  6. Step Six – Financial Management – $9.95 – notify us when you have done your course!!!! (If course is not done before discharge date, the court can close the case. The court costs for reopening a case is 260 dollars). The course is typically 2 hours and involves mostly reading on-line. There is typically a simple quiz at the end. Most companies including the one I have recommended will allow you to do the course in sessions. I am not aware of any chat session or phone call that is required.

  7. Step Seven – Discharge – (approx. 60 days after 341 Hearing). – This is the order that tells the creditors that you do not owe them anymore. You will be issued a copy of the discharge through the mail along with a list of everyone who is getting a copy of the discharge. With few exceptions, most creditors are discharged. Receiving a discharge does not necessarily means that the case is closed, but for the most part your role in it is.

  8. Step Eight – 2nd Part of Filing Fee – Due 30 days after discharge (if needed, I will work with people on the second part of the fee)