Bankruptcy is a muddled procedure but just like with anything, if you take a step back and look at it as a step-by-step procedure then the complicatedness will rapidly dissolve. Chapter 7 bankruptcy involves a trustee selling off all the debtor's nonexempt belongings and distributing payment to the debtor's various lenders. But what are the nuts and bolts of the process? How does it start and end?
Filing Chapter 7 Bankruptcy
All the necessary information.
Complete information on your creditors and their names, contact info, and amount of debt owed; your income and its source, frequency, and amount; a complete list of your property as well as a list detailing your price tag of living.
A petition.
It is strongly recommended you retain a licensed bankruptcy attorney at this point. He or she'll assist you in filling out your petition with the court for filing Chapter 7 bankruptcy. Before filing you will have to undergo a "means test" which will decide your eligibility for filing Chapter 7 bankruptcy.
Automatic stay.
This is good news for the debtor because it's essentially the court telling all the creditors to "back off." Creditors are notified that bankruptcy has been filed and they are no longer allowed to contact the debtor pertaining to collection payments.
341 Meeting.
This meeting is an opportunity for any of your creditors to voice any objection they may have concerning your bankruptcy and the exempt assets you included. Chances are no creditors will bother showing up if they can't realistically get 50 cents on the dollar owed to them. The petition is approved and the court-appointed trustee sells off all applicable nonexempt assets.
You're contacted via mail within ninety days whether or not you've been granted a discharge on your remaining loans. This means you're no longer legally obligated to pay off the loans. Remember that you're not eligible for discharge on certain loans like alimony, kid backing, student loans, etc. you'll still be responsible for paying these off after your bankruptcy.
Your credit.
Once the legal procedure of the bankruptcy has run its course it's now time to start the arduous, years-long task of rebuilding your credit to a respectable rating. The financial management course required should help you in building a plan to complete this goal.
Get Started Today
Contact a licensed bankruptcy lawyer today and go over your situation with them. From there you'll have a positive idea of whether or not bankruptcy is the course of motion most appropriate for you and, if so, which type of bankruptcy.
