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Chapter 7 Bankruptcy
A Chapter 7 bankruptcy is the most
common consumer Bankruptcy. A Chapter 7 typically will
discharge
or eliminate credit card balances, installment loans, medical
bills, and most other unsecured debt. In nearly all cases, a debtor
will keep all his or her belongings and property. If a debtor is
current on his or her house and automobile payments, a debtor
typically is
able to continue the payments to his or her lender and retain
possession in virtually all Chapter 7 cases.
A Chapter 7 will take about three
months, costs $299 in filing fees (attorney fees are additional)
and usually requires one appearance in front of a
trustee.
The first step in filing is to meet
with one of our attorneys for a free consultation. The
consultation takes approximately 30-45 minutes. At the
consultation the attorney will review your assets, go through a
budget and review your debts. After the review, the attorney will
have the background information necessary to give you proper legal
direction for your debt relief.
Current law requires that all
attorneys fees be paid before a case is filed. Unfortunately, the
current status makes it difficult for our clients to file-
especially when they have to get a case filed immediately.
However, our office has a way to file your case without the attorneys
fees paid up front. Our firm allows a case to be filed if there is
a third party to guarantee the fees. We can file the case and bill
the third party $90 a month on the fees. Moreover, since the
Bankruptcy Code allows you to pay any debt voluntarily, you can
pay the attorney fees after the case is filed.
After all the necessary information
is provided to our office, we will prepare the bankruptcy
petition. We need you to review and sign the
petition. You will
return the petition, and we will file it with the court.
When a Chapter 7 is filed, the
automatic stay is in effect. The
automatic stay immediately stops
creditors from the many collection processes. The harassing phone
calls, conciliation court dates and garnishment threats must
cease. While the automatic stay is in place, creditors cannot
legally garnish your wages, repossess your car or other property
or cut off your utility service.
Approximately 30 days from your
filing date you will be required to attend a
Meeting
of Creditors.
The
Meeting of Creditors generally lasts five minutes. This
meeting is not in a typical court room setting and is not in front
of a judge; instead, a specially appointed
trustee administers the
meeting. The trustee will inquire into your assets, liabilities and
general financial condition.
At the conclusion of the
Meeting
of Creditors, most Chapter 7 cases are essentially over. You have to
wait about 60 days until your discharge order is signed by the
judge. A discharge wipes out those debts that are dischargeable,
and you no longer have an obligation to pay those debts.
A discharge is not the end of the
bankruptcy but just the beginning of the
credit repair process.
You should take steps to rebuild your credit to obtain better
interest rates for future loans. Typically, if you properly and
aggressively rebuild your credit, you can look at
purchasing a
home in two years |
