Filing Chapter 7 bankruptcy can be an overwhelming decision, and most people considering it do not have any idea where to start. Many do not understand the extent of the process they face. The truth is there are many steps involved in filing Chapter 7 and knowing what they are is an important part of making an informed decision.
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For people considering Chapter 7 bankruptcy, it's not always easy to get clear information and more often than not, looking around the Internet leads to an onslaught of debt consolidation companies looking to make a buck from other people's hardship. The information below lays out the process clearly without bias for people who seek straight answers.
Eligibility for Chapter 7 Bankruptcy
Chapter 7 bankruptcy is essentially a discharge of debt and a liquidation of assets in order to satisfy creditors. First, a debtor must see if they qualify for Chapter 7 or consider other avenues like Chapter 13 or debt consolidation. You may qualify for Chapter 7 bankruptcy if you have few or no assets and/or no surplus income after your monthly expenses.
To determine whether you are eligible, you will need to file a federal form called the 22A, also known as "the Means Test". If your income is below the state median, you are automatically eligible, although in some cases your income can be above this level.
You Qualify, Now What?
While our debt relief attorneys can explain the process and qualifications in detail, here are the three broad steps of a Chapter 7 bankruptcy:
- After eligibility is determined, the next step is filing other required paper work. Your petition, schedules (lists) and statements (answers to questions) are electronically filed with the bankruptcy court clerk. A judge and trustee are automatically assigned to your case.
- About 30 days later, you will attend a meeting with your attorney and Chapter 7 trustee. This is commonly but erroneously referred to sometimes as a “creditors’ meeting.” However, your actual creditors will also be notified of this meeting.
- Sometime after filing, and before 44 days after the meeting of creditors, you must complete a Personal Financial Management Course. If you have any non-exempt property, it will be turned over to the Trustee to administer.
Once all of these steps have been taken, your debts can be discharged.
About the Personal Financial Management Course
The mandatory Personal Financial Management Course is designed to instruct debtors about bankruptcy parameters and offer tools to better manage their finances in the future. Failure to complete this course can lead to a dismissal of the bankruptcy case. This tool helps many people manage their finances in a more structured and sound way.
Once a debtor completes the course, he or she will submit a certificate of completion to the bankruptcy trustee for finalization. When all of these steps are completed, the debtor and all accepted creditors will receive notice that debts have been discharged and the debtor can begin rebuilding credit.
While it is possible to file for Chapter 7 bankruptcy without an attorney, it is strongly discouraged. The paperwork is complex, precise and demanding. It takes an attorney with experience in this practice area to represent your best interests. Our firm has more than 30 years of experience helping those who have spiraled into debt for many reasons. We have helped thousands of people get back on the road to recovery.
Petitioning for Chapter 7 bankruptcy is your legal right. To find out whether you are eligible, call our office today for a free initial discussion.
Call now for debt relief at 817-737-5436
We offer free consultations
Alice Bower, Attorney at Law, is a personal bankruptcy lawyer practicing in Fort Worth, Arlington, Irving, North Richland Hills, Grapevine, Colleyville, Mansfield, Burleson, Grand Prairie and Bedford.