Chapter 7 Bankruptcy

While filing for Chapter 7 bankruptcy may seem like a disaster, you should actually be quite thankful that it exists. Chapter 7 bankruptcies exists to protect your personal belongings and give you a little breathing room so you can get back on your feet and formulate a plan to pay back your creditors without them systematically harassing you.

When you do in fact conclude that you have no choice but to file for Chapter 7 here are the six things that you will need, in order to have every thing in place for a successful claim.

Not getting these things together can lead to loss of assets that you did not need to lose.

  • List of creditors;
  • Schedule of assets and liabilities;
  • List of exempt property;
  • Schedule of current income and expenditures;
  • Statement of your financial affairs;
  • Statement of intent regarding consumer debts secured by property.

After you have done this you will turn over all your property (expect the most important property­ that is what is exempt- to a trustee who is impartial and appointed by the court.

Next you get the ‘order of relief’. This gives you an automatic stay, which prohibits all of your creditors from coming after you. Now you cannot be asked to pay anyone back until your bankruptcy proceeding.

Now that you have officially filed for bankruptcy you are in the hands of the court. They will set up a 341 meeting. This is a tough part, as your creditors will ask you questions on how you will pay them back.

This also gives creditors the chance to challenge your list of exempted items. Ultimately it is up to the bankruptcy judge to decide which items on the list are fair. If you creditors don’t object within 30 days they cannot do so in the future.

Then, the creditors will assess how much you owe them. The court will mediate this process as well. They have 90 days to do this, and you can bet they won’t miss that deadline.