Filing A Chapter 7 Petition
The Chapter 7 bankruptcy process truly begins when you file your documents and a petition with the bankruptcy court. This court serves the area where you live or where your business is organized .
A married couple can choose to file a joint petition together or to file as individuals.
In an emergency , you can file for bankruptcy without filing all of the necessary forms. However, you must file the remaining paperwork within 15 days.
You must attend before you file. It is required to be:
- With a credit counseling agency approved by the state
- At least 180 days before filing for bankruptcy
This counseling agency will help you determine whether Chapter 7 is the best option for you.
Sometimes other alternatives, such as entering into a repayment plan with the creditor, will resolve financial problems. It’s important to work with a local bankruptcy lawyer who can help you figure out of Chapter 7 is the best option for your situation.
Find Out If You Qualify To File Bankruptcy
When debt becomes insurmountable or your ability to pay changes due to job loss, a change in the family dynamic, or any other reason, you might need the benefits of bankruptcy. The following people may qualify to file for Chapter 7:
- People who have made a valid effort to repay debt
- People who cannot realistically repay their debt
- Individuals, married couples, and certain businesses
While the bankruptcy process is demanding, filers dont need to take on this challenge alone. Our lawyer will determine if you qualify for Chapter 7 bankruptcy and explain how discharging your debt might allow you to start over financially.
Required Information To Submit When Filing Chapter 7
Filing for Chapter 7 requires information about income, debts, and property. You should be ready to submit:
- A list of all credit cards and the amount you owe
- Any child support or spousal support you pay and/or owe
- Most recent federal tax return
- Last year’s tax return
- Paycheck stubs for the past 60 days
- A list of your assets, property, and any liabilities
- Current monthly total income and expenses
- Your general financial affairs
- Any current contracts or unexpired leases
- Proof of your credit counseling class
- Your debt repayment plan
- A record of qualified federal or state education tuition accounts or interest gained
Even If you decide to file together you both still need to submit all the documents above as if you were filing alone, such as both spouses submitting their income records.
Also Check: How Does Filing Bankruptcy Affect Buying A House
Immediate Actions Taken After The Bankruptcy Petition Is Filed
Once your Chapter 7 bankruptcy case is filed with the Court the real fun begins. The Bankruptcy Court sends out notice of your case filing to all of your creditors. Once your creditors receive notice of your bankruptcy petition contact from creditors will stop. Your court date is scheduled approximately 6-8 weeks after your filing. The Court automatically schedules this hearing. You will receive a notice from the Bankruptcy Court stating the date, time and location of your bankruptcy hearing.
Chapter 7 And Chapter 13 Forms
Everyone who files for Chapter 7 or Chapter 13 must complete and file the following forms even if there’s nothing to report . If you don’t file a form because you don’t think it applies, the trustee will move to dismiss your case.
- B 101 Voluntary Petition for Individuals Filing for Bankruptcy
- B 105 Involuntary Petition Against an Individual
- B 106 Decl Declaration About an Individual Debtor’s Schedules
- B 106 Sum A Summary of Your Assets and Liabilities and Certain Statistical Information
- B 106A/B Schedule A/B: Property
- B 106C Schedule C: The Property You Claim as Exempt
- B 106D Schedule D: Creditors Who Hold Claims Secured By Property
- B 106E/F Schedule E/F: Creditors Who Have Unsecured Claims
- B 106G Schedule G: Executory Contracts and Unexpired Leases
- B 106H Schedule H: Your Codebtors
- B 106I Schedule I: Your Income
- B 106J Schedule J: Your Expenses
- B 107 Your Statement of Financial Affairs for Individuals Filing for Bankruptcy
- B 121 Your Statement About Your Social Security Numbers
Additional required form. You’ll also need to prepare a list of the names and addresses of your creditors using the format required by your court’s local rules. You’ll find the local rules on the court’s website.
You May Like: Can You File Bankruptcy For Free
What To Do After Chapter 7 Bankruptcy
What awaits the bankrupt individual on the sunny side of a discharge? Possibly hopefully a whole new way of thinking about money.
Bankruptcy is a fresh start for a debtor, says Catherine Peek McEwen, a Federal Bankruptcy Judge for the Tampa-based Middle District of Florida. Thats the pep talk I give my law students, and to everyone who comes into my courtroom.
That restart button must not be confused with a Men in Black Neuralyzer. Amnesia about the pain of a process is great for childbirth so weve been told but wretched for living a post-bankruptcy life.
A successful post-bankruptcy life will involve careful budgeting, prudent spending, diligent earning and investing, keeping your accounts current, and otherwise overseeing an orderly financial house.
If all this sounds daunting, or youre certain youll need to be coached up routinely, get with a nonprofit agency. There you will find free, no-obligation assistance from professional certified counselors. Helping consumers develop an affordable monthly budget is their specialty.
Youll benefit from their training and experience as you plot your financial future with a livable budget enhanced by savvy tips on how to make the bottom line come out in your favor every month.
You, however, being both happier and wiser, and in close association with your credit counselor, will keep the lessons of Chapter 7 close to your heart.
Discharging Debts In Bankruptcy
A bankruptcy discharge releases a debtor from being personally responsible for certain types of debts. So, after a bankruptcy discharge, the debtor is no longer legally required to pay any debts that are discharged.
The discharge prohibits the creditors of the debtor from collecting on the debts that have been discharged. This means that creditors have to stop all legal action, telephone calls, letters, and other type of contact with the debtor. This prohibition is permanent for the debts that have been discharged by the bankruptcy court.
You cannot discharge all debts in bankruptcy. Some of the most common debts that you cannot get rid of in bankruptcy are debts from child or spousal support, most student loans, most tax debts, wages you owe people who worked for you, damages for personal injury you caused when driving while intoxicated, debts to government agencies for fines or penalties, and more.
Also Check: Can Bankruptcy Stop Eviction In Georgia
Pros And Cons Of Chapter 7 Bankruptcy
Filing for bankruptcy is serious business, so its important that you understand the benefits and risks before beginning the process.
Can offer a fresh financial start and your credit score may start to go up after your debt is discharged
You may be able to keep certain exempt assets
Collection efforts by your creditors must stop as soon as you file
May impact your ability to get credit, buy a home or car and rent an apartment for some time
Can remain on your credit report for up to 10 years
You may lose some of your assets, such as vehicles, jewelry and real estate
In order to file Chapter 7, you must be able to pass a means test, which is designed to determine whether you have the means to repay a portion of your debts. The process requires you to provide information about your income, expenses and debt, and if you dont pass, your case may be converted to Chapter 13 or be dismissed altogether. Additional information on means testing is available through the U.S. Department of Justice.
But just because youre eligible doesnt mean filing for bankruptcy is the right choice for your financial situation. Chapter 7 bankruptcy may make sense for people who:
Chapter 7 Bankruptcy Series Part Five: Preparing Signing And Filing A Bankruptcy Petition
In this blog we will explore a very important step in your Chapter 7 Bankruptcy process: Your Chapter 7 Bankruptcy Petition Signing and Filing.
Once you have met with me for your free initial consultation, retained me to file your Chapter 7 Bankruptcy Petition and delivered to me all of the required documents, I will then prepare your Chapter 7 Bankruptcy Petition and schedule a convenient time for you to come in to our office to sign your Petition.
Your Bankruptcy Petition signing is a very serious step in your Bankruptcy Process and you will be required to carefully read your petition. This appointment will take approximately one hour in which I will go over each and every page with you and answer any questions you may have. Ultimately, you will be asked to sign several pages of the Petition under oath, swearing that the information provided is true and accurate to the best of your ability, and I will then electronicall or texty file your Petition with the Bankruptcy Court.
The Summary will be followed by a series of Schedules as follows:
For more information or to find out if you qualify for Bankruptcy, please call or text our office at 203-713-8877.
Also Check: Is It Easy To File Bankruptcy
Nonexempt Property Under Chapter 7
Most people who file for bankruptcy do not lose any assets in liquidation because so many types of property are considered exempt. However, some property cannot be protected from creditors during the bankruptcy process. This is known as nonexempt property.
Property that is nonexempt may include:
- Expensive musical instruments
- Collections of stamps, coins, and other valuable items
- Family heirlooms
- Cash, bank accounts, stocks, bonds, and other investments
- A second car or truck
- Vacation homes
How Chapter 7 Works
A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. In addition to the petition, the debtor must also file with the court: schedules of assets and liabilities a schedule of current income and expenditures a statement of financial affairs and a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007. Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case . 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling evidence of payment from employers, if any, received 60 days before filing a statement of monthly net income and any anticipated increase in income or expenses after filing and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302. Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors.
Also Check: How To File Bankruptcy Online Free
Statement Of Intention For Individuals Filing Under Chapter 7
If you have secured debts, executory contracts, or unexpired leases, the Statement of Intention is where you tell the court and the creditor what you intend to do with the property and the debt. For secured debts, you must indicate whether you intend to keep or surrender the property. If you want to keep the property, state whether you wish to redeem or reaffirm the debt.
If you don’t want to keep a certain piece of property, such as a car or house, you can walk away by surrendering the property to the creditor. When you surrender property, you essentially give it back to the creditor. Your personal liability for the loan will be wiped out by the discharge, so you don’t need to worry about the creditor coming after you to collect a deficiency if it can’t sell the property for enough money to pay off the loan.
Reaffirming or Redeeming the Debt
If you want to retain the property, a secured lender may require you to reaffirm your debt. Your bankruptcy discharge eliminates your personal liability for all discharged debts. By reaffirming, you sign a new contract with the lender and agree to make yourself personally liable for the debt again despite your discharge.
Click the link to view or download Form 108Statement of Intention for Individuals Filing Under Chapter 7 from the U.S. Court bankruptcy form webpage.
Reaffirming Debt After Chapter 7 Bankruptcy
Occasionally, after you file Chapter 7 bankruptcy, your creditor will want you to reaffirm a debt. Reaffirming a debt is entering into a new contract with the creditor.
Its common to enter into reaffirmation agreements when you have financed a car you would like to keep after your bankruptcy petition is resolved.
Since this is a new agreement after your bankruptcy case is complete, any reaffirmed debt is considered post-petition debt.
Your bankruptcy discharge doesnt forgive your obligation to pay under this new agreement. You need to make your payments as agreed, otherwise the creditor can sue you for the money you owe, and they can come and take the property to satisfy the new debt.
Attending The Meeting Of Creditors
The § 341 Hearing or Meeting of Creditors is typically the only court hearing you have to attend. The Court schedules 3-4 hearings every 30 minutes. Therefore, the hearing does not last all day or all morning/afternoon. If your hearing is set for 9:00 am, and you are the fourth case called, you should be done by 9:30 am. This hearing is a time for the Trustee assigned to your case to ask you questions. Their job is to verify the information you filed in your bankruptcy petition. Their job is also to collect unprotected property, liquidate this property, and use the proceeds for the benefit of your creditors. If any of your creditors want to attend the hearing they are more than welcome. These hearings are public and anyone can attend.
Forms You Need To File In Chapter 7 Bankruptcy
Here’s a list of the forms most people need when they file for Chapter 7 bankruptcy. Some of these, however, may not apply to your case. For example, if you are not requested a filing fee waiver, you won’t need to fill out Form B 3BA Application for Waiver of Chapter 7 Filing Fee.
B 101 Voluntary Petition for Individuals Filing for Bankruptcy
B 101A Initial Statement About an Eviction Judgment Against You
B 101B Statement About Payment of an Eviction Judgment Against You
B 103A Application for Individuals to Pay the Filing Fee in Installments
B 103B Application to Have Chapter 7 Filing Fee Waived
B 106 Summary of Your Assets and Liabilities and Certain Statistical Information
B 106A/B Schedule A/B: Property
B 106C Schedule C: The Property You Claim as Exempt
B 106D Schedule D: Creditors Who Hold Claims Secured by Property
B 106E/F Schedule E/F: Creditors Who Have Unsecured Claims
B 106G Schedule G: Executory Contracts and Unexpired Leases
B 106H Schedule H: Your Codebtors
B 106I Schedule I: Your Income
B 106J Schedule J: Your Expenses
B 106J-2 Schedule J-2: Expenses for Separate Household of Debtor 2
B 107 Your Statement of Financial Affairs for Individuals Filing Bankruptcy
B 108 Statement of Intention for Individuals Filing Under Chapter 7
B 121 Your Statement About Your Social Security Numbers
B 122A-1 Chapter 7 Statement of Current Monthly Income
B 122A-1 Supp Statement of Exemption from Presumption of Abuse
B 122A-2 Chapter 7 Means Test Calculation
You May Like: How Many Times Has Bloomberg Filed For Bankruptcy
Chapter 7 Statement Of Your Current Monthly Income And Means Test Calculation
To qualify for Chapter 7 bankruptcy, a debtor’s disposable income must be low enough to pass the means test. The means test compares your average gross monthly income for the six months before bankruptcy against the median income for a similar household size in your state.
If your income is below the state median, you automatically pass and don’t have to fill out both forms. However, if your income is above median, you have to complete the second form and disclose your expenses to see whether you qualify.
Click the link to view or download Form 122A-1Chapter 7 Statement of Your Current Monthly Income, Form 122A-1SuppStatement of Exemption from Presumption of Abuse Under §707, or Form 122A-2Chapter 7 Means Test Calculation from the U.S. Court bankruptcy form webpage.
Alternatives To Chapter 7
Debtors should be aware that there are several alternatives to chapter 7 relief. For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code. Under chapter 11, the debtor may seek an adjustment of debts, either by reducing the debt or by extending the time for repayment, or may seek a more comprehensive reorganization. Sole proprietorships may also be eligible for relief under chapter 13 of the Bankruptcy Code.
In addition, individual debtors who have regular income may seek an adjustment of debts under chapter 13 of the Bankruptcy Code. A particular advantage of chapter 13 is that it provides individual debtors with an opportunity to save their homes from foreclosure by allowing them to “catch up” past due payments through a payment plan. Moreover, the court may dismiss a chapter 7 case filed by an individual whose debts are primarily consumer rather than business debts if the court finds that the granting of relief would be an abuse of chapter 7. 11 U.S.C. § 707.
Debtors should also be aware that out-of-court agreements with creditors or debt counseling services may provide an alternative to a bankruptcy filing.
Read Also: How To Get Liquidation Pallets