Bankruptcy filing for chapter 7
Bankruptcy is a major financial decision that should not be taken in haste. You should first consider alternatives to filing bankruptcy and still if no option is left then consider filing it. With the new laws in bankruptcy it has become mandatory for people filing bankruptcy to undergo a counseling session so that they would know the side effects of bankruptcy and how to manage their debts.
Personal bankruptcy can basically be filed under Chapter 7 and Chapter 13. In this article we will be talking about filing Chapter 7 bankruptcy.
Basics of Chapter 7 bankruptcy
Chapter 7 Bankruptcy is also called as liquidation bankruptcy. In this type the non-exempt assets of the debtor are sold by, the Chapter 7 trustee who would then distribute the amount among the creditors. This type of bankruptcy is the quickest and the simplest form of filing bankruptcy.
The Chapter 7 bankruptcy filing starts with filing the official petitions, statements and schedules of the financial affairs. You are required to provide a list of all your debts and assets when filing these forms. You are also required to provide your financial history. This is the most important and the most time consuming part of filing Chapter 7 Bankruptcy.
You are required to provide the accurate address of the creditors and the amount that you owe to them. All debts that are not dischargeable or those that you intend to reaffirm also need to be listed.
After this is done then the court assigns a trustee and gives the notice to all the creditors that you have filed for bankruptcy. You will also get a copy of this notice when it is sent to the creditors.
Meeting the creditors
The first meeting with the creditors after filing for Chapter 7 bankruptcy is called as the 341 meeting. In this meeting the trustee and the creditors are free to ask the debtor about the assets that he or she has and the liabilities that the debtor has to pay.
After the meeting if there are assets that are identified as non-exempt then the trustee would take control of these assets and would sell these assets. Whatever amount is received the trustee would pay the expenses towards the administration of the bankruptcy case and the remaining amount would be distributed among the creditors according to the priority of the claims.
The trustee would then check your income from all the sources and then would assess whether there is any amount remaining after meeting your living expenses to be paid to the creditors. Usually the only responsibility that the debtor has after the 341 meeting is to give his or her full co-operation to the trustee and provide the trustee with all the information that is required.
If the trustee or the creditors wish to challenge the right of the debtor to file bankruptcy then they have 60 days after the 341 meeting,
Dischargeable debts in Chapter 7 Bankruptcy
There are some of the debts in Chapter 7 bankruptcy that can be discharged. This is because law discharges these debts. Some of these include student loans, support, priority taxes and liens. Debts that are reaffirmed also are discharged in Chapter 7 bankruptcy.
Eligibility to file Chapter 7 bankruptcy
To be eligible to file bankruptcy under chapter 7 bankruptcy the debtor should fulfill the certain criteria : The debtor may be an individual, a partnership, or a corporation or other business entity
As per the new laws the first step in deciding whether a person is eligible for Chapter 7 is to assess the monthly income of the person in comparison to the median income of a house of the size of your family in the state where you live. If your income is equal to or less than the median income then you can file under Chapter 7. However, if it is more than Chapter 7 then you are required to pass the means test.
Means test is another inclusion in the Chapter 7 bankruptcy filing eligibility. The aim of this test is to assess whether you have enough disposable income remaining after all the expenses and the debt payments have been subtracted. If the amount that is left after subtracting is less than a defined limit then you can file under Chapter 7 bankruptcy.
Taking the help of an attorney
It is always advised that the person filing for Chapter 7 Bankruptcy should take the help of an attorney. It is best because the attorney would be able to understand the laws and guide the debtor on what would be the best option for him or her.
Some of the attorneys helping in filing Chapter 7 bankruptcy are mentioned below.
Jack I Hyatt:
They have been practicing law since 1973 and have helped a number of clients in filing bankruptcy. They have low payment plans and initial free consultation. You can contact them at 1866 Autumn Frost Lane ; Baltimore, MD 21209-1131 ; phone: 410-486-1800.
Polk Law Firm:
They take up chapter 7 and 13 bankruptcy cases and provide debt relief and filing services. They have helped a number of clients in coming out of bankruptcy. You can contact them at 100 N. Central Expressway, Suite 1018 , Dallas, Texas 75201 ; Ph: 214-742-9805; Fax: 214-742-7212.
They have been practicing law since 1987 and helped a number of client in filing bankruptcy under various chapters. If you wish to contact them for your case evaluation or for a free consultation then you can fill out the form on their web site and get in touch with them.
Koffel Jump:
They take up cases of bankruptcy and help people with debt reduction and debt settlement. They basically deal with Chapter 7 and 13 bankruptcies. You can contact them at 4200 Regent Street, Suite 200 Columbus, Ohio 43219; Client Services Line at 614-481-7227.
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