CHAPTER 7 INFORMATION
A Chapter 7 bankruptcy petition is usually filed by individuals who wish to wipe out or discharge their debts in bankruptcy. Credit card bills and medical bills are dischargeable in bankruptcy unless an exception exists. Some debts such as certain income taxes and student loans cannot be discharged in bankruptcy. As soon as the petition is filed with the bankruptcy court, the automatic stay becomes effective which means that your creditors must cease all collection activity.
Important factors that determine whether you are eligible to file a Chapter 7 bankruptcy petition include the amount of equity you have in property you own as well as the amount of income you earn. If the amount of equity in your property is too great or your income is above the amount you are allowed to earn to file a Chapter 7 bankruptcy petition, you will not be able to file under Chapter 7. If that is the case, a Chapter 13 petition may be an option to eliminate some or most of your debt. If the equity in your property and your income are in line with the Chapter 7 requirements, you will be able to file a Chapter 7 bankruptcy petition and discharge your dischargeable debts.
After your Chapter 7 bankruptcy case is complete, the bankruptcy will stay on your credit report for ten years. Notwithstanding the foregoing, our firm has had clients purchase homes and buy or lease cars after they filed their bankruptcy petitions.
CHAPTER 7 PROCESS
After your Chapter 7 bankruptcy petition is filed with the Court, the Court will send your creditors and you a notice confirming that your petition has been filed. This notice puts your creditors on notice that they must cease all collection activity. It also tells you when your Creditors Meeting will take place.
The Creditors Meeting usually takes place about one month after your bankruptcy petition is filed. At the Creditors Meeting, the Trustee assigned to your case will ask you several simple questions to make certain that you are eligilble to file a Chapter 7 bankruptcy petition. If you retain me as your lawyer, I will be with you at the Creditors Meeting. Creditors rarely appear. This is the only hearing you will be required to attend.
About three months after your bankruptcy petition is filed, the Court will issue a Discharge of Debtor which means that your dischargeable debts have been eliminated in the bankruptcy. Some debts such as certain income taxes and students loans cannot be discharged in bankruptcy. Credit card bills and medical bills can be discharged in bankruptcy, unless an exception exists.
After the Discharge of Debtor is issued by the Court, your case will be closed and you may begin rebuilding your credit.