Chapter 7 Bankruptcy
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Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows relief of debt no matter how much you owe or whether your debts are solvent or insolvent. To qualify for chapter 7 bankruptcy, you must file all required forms, take a means test to prove you are eligible, take an approved credit counseling class, appear at a meeting with the court appointed trustee and pay filing fees. A chapter 7 bankruptcy 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 chapter 7 bankruptcy applicant must file schedules of income and expenditures, contracts leases, a statement financial affairs as well as tax returns and a copy of their credit counseling certificate. Chapter 7 bankruptcy fees include a $245 case filing fee, $39 administrative fee, and $15 trustee surcharge. These fees vary depending upon which state you live in, so check with your bankruptcy attorney or the bankruptcy clerk’s office for precise fee. Normally, the fee must be paid to the clerk at the time of filing, however individual debtors may pay in four monthly installment no later than 120 days after filing their chapter 7 bankruptcy documents. Filing a chapter 7 bankruptcy automatically stays or stops most collections actions against debtor or the debtor’s property. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk will give notice of the chapter 7 bankruptcy case to all creditors whose names and addresses are provided by the debtor. Between 20 and 40 days after the chapter 7 bankruptcy petition is filed, the court appointed case trustee will hold a meeting of creditors. During this mandatory meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding the debtor's financial affairs and property. Within 10 days of the creditors' meeting, the U.S. trustee will report to the court whether the chapter 7 bankruptcy case should be approved and the applicants debts discharged or presumed to be an abuse under the means test. A chapter 7 bankruptcy discharge releases debtors from personal liability for most debts and prevents creditors owed those debts from taking any further collection action. Because a chapter 7 bankruptcy discharge is subject to many exceptions, debtors should consult a competent bankruptcy attorney before filing to discuss the scope of the discharge. Generally, individual debtors receive a discharge in more than 99 percent of chapter 7 bankruptcy cases. To Read More Click Here
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