What is Chapter 7 Bankruptcy?
Chapter 7 Basically wipes out your unsecured debt and your secured debt if you are willing to surrender or give up the collateral.
Chapter 7 also called a liquidation bankruptcy is what most people think about when they think of bankruptcy. It is the most commonly filed type of case with over a million cases filed annually in the United States. The theory is that the person or married couple filing gives up any non-protected or exempt property in exchange for having most or all of their debt wiped out or discharged by order of the Bankruptcy Judge so that creditors may never take any collection actions against them, ever. In the vast majority of my cases, I'd say around 98% of them, the Trustee in the bankruptcy case finds no property that is not protected by law and therefore makes no distribution to unsecured credtitors. This is called a "no asset" case and the debtor will be granted a discharge and allowed to keep the exempt property as the basis of their fresh start.
Thousands of Satisified Bankruptcy Clients
My office has filed thousands of these cases over the past 20+ years and is very proficient in handling them from start to finish. My goals are two fold when I represent anyone in bankruptcy court. I want you to keep as much if not all of your property as possible, while at the same time wiping out or discharging as much debt as possible. Typically all credit card debt, medical bills, bank or credit union signature lines of credit, payday advance loans, large or past-due utility bills, overdrawn bank accounts and most all debt with the exception of student loans, recent income taxes and child support or alimony can be completely wiped out by order of the court.
My office has the Bankruptcy filing process down to a science. From our initial meeting forward, we carefully and deligently guide your case through the system. A case is started after an initial consultation where it is determined whether bankruptcy is in your best interest, whether there are any alternatives available, we discuss the pros and cons of a bankruptcy filing and conduct a thorough analysis of your assets and determine if there is any risk of those assets being liquidated to pay creditors. The various Chapters available, usually Chapter 7 or 13 are discussed and after weighing the pros and cons, the decision to file is left with my clients.
Once the decision is made, my office gathers documents from such as pay-stubs, tax returns, car titles, bank statements, real estate documents and, of course, your bills, collection letters, credit reports and judgments, etc. My office pulls a special bankruptcy specific merged credit report for all of our clients shortly before the petitoin is filed to insure that we have the most accurate, up-to-date information with addresses of the bankruptcy or legal departments of your creditors and supplement this report with the statements and collection letters that you provide our office. We then prepare your bankruptcy petition listing all of your assets as well as all of your debt and your current monthly income and expenses, as well as specific information that is requested in the bankruptcy petition statement of financial affairs and means test.
After the bankruptcy petition is complete and thoroughly reviewed, it is signed and then filed with the bankruptcy court. Approximately one month later, there is a hearing called the Meeting of Creditors or .341 Hearing. At this hearing, the Trustee will examine you under oath and basically go over the paperwork that was provided to his or her office and teh bankruptcy petition that was filed with the court. You, myself your attorney and the Trustee will be present at this 5 to 10 minute meeting. Despite being called the meeting of creditors, in most cases, creditors rarely appear other than car finance creditors or credit unions wanting you to keep your obligations with them.
After the .341 hearing there is a 60 day waiting period required by law in which creditors are given the opportunity to object to your getting a discharge. This is rarely done by creditors as they must have a good reason to object to the discharge such as alleging that you committed fraud in obtaining the credit or you caused another's property damage via willfull and malicious conduct and they are asking the court to except their particular debt from the discharge order.