Chapter 7 Bankruptcy
A Chapter 7 Bankruptcy is often referred to as a “straight Bankruptcy” or “liquidation Bankruptcy”. A Chapter 7 Trustee is appointed to the case to review/ investigate a Debtor’s assets to determine if any of the assets are worth liquidating for the benefit of a Debtor’s creditors. Because most Debtors’ assets are usually exempt, there may not be a liquidation of the Debtor’s assets. These cases are called “no-asset cases.” In most Chapter 7 cases, the Debtor will receive a discharge (forgiveness of the debts) a few months after the filing of the case.
In order to qualify for Chapter 7, a Debtor must pass the “means test”, which is a test that determines whether a Debtor’s income is above median. If a Debtor is above the median income (i.e. makes too much money to file Chapter 7), the Debtor should file Chapter 13 Bankruptcy. The other reasons why a Debtor should file for Chapter 13 Bankruptcy rather than Chapter 7 are because (1) there are non-exempt asset(s) at risk of liquidation; and/ or (2) the Debtor is behind on payments on a secured asset he wants to retain, such as a mortgage on a house or car payment. In those situations, a Debtor should file Chapter 13 to reorganize the debts.
You will have a free initial consultation where we will review your history, your financial situation and your options.
If you choose to move forward with a bankruptcy filing, you can anticipate a certain procedure in a Chapter 7 case, which is set forth as follows:
1. You pay the retainer and costs that will be fully explained to you. Your attorney will then meet with you to pull your credit and review the paperwork required.
2. Our office will prepare your bankruptcy paperwork (known as schedules). The bankruptcy schedules are detailed listings of your assets, liabilities, budget and financial affairs. We will work with you to make sure that the schedules are complete and accurate so your case goes as smoothly as possible.
3. Your attorney will meet with you to thoroughly review and sign the schedules and file your case with the Court.
4. Shortly after the schedules have been filed with the Court, you will receive the time and date of your Meeting of Creditors ("MOC"). You and your attorney will meet to thoroughly prepare you for the MOC. We will discuss where to go, when to be there, what to wear, what to bring and what will be asked of you. Your attorney will be with you at the MOC.
4. You should receive a discharge 60 days after your MOC.
5. After you are granted a discharge, you will meet with your attorney for an Exit Conference where we will review where you have been, where you are and where you plan to go from a financial standpoint.
Your attorney is with you every step of the process--- and we will give you tools to help you achieve a successful financial future.