| Chapter Seven Bankruptcy |
| 05.04.09 | |
There are two options for filing bankruptcy as a consumer, chapter 7 and chapter 13 bankruptcy. Chapter 7 is often called liquidation as all of your property that is not exempt is sold in order to pay off your debts. Exempt belongings is that property that the bankruptcy trustee allows you to keep in order to live your life normally, like a automobile, clothes, furniture to sit on, etc. Every state sets their bankruptcy exemptions, as well as the Federal bankruptcy exemptions that can be used in some states.
In order to legally to file a ch 7 bankruptcy petition, cannot be a business or farm, must be an individual, you must take a credit counseling course from an approved agency inside the 180 days before filing for ch 7 bankruptcy relief, and pass the means test which is completed with yor petition.
In a chapter 7 bankruptcy petition, you will have to file schedules that list your creditors, belongings, income and expenses. Copies of tax returns, pay stubs and credit counseling certificate will also have to be filed. Bankruptcy filers who are married must provide the spouses information even if they are not a href=”http://www.bankruptcyformprocessing.com”>filing bankruptcy together so the bankruptcy court can determine the households ability to pay the debts.
When completing your petition, you will have the option to continue paying and holding onto your property if you are able to, such as your dwelling or automobile, by making a reaffirmation agreement with the creditor. By reaffirming the debt you are acknowledging that you intend to make payments. If the trustee grants your reaffirmation agreement, the creditor may be able to call you to collect the debt in the future.
When you file your ch 7 bankruptcy papers you will have to pay up a filing fee of $299. This cost can be paid in installments, up to 4 no later than 120 days after filing your petition. Once you file, the bankruptcy stay is in effect, creditors cannot call, collect or file lawsuits. Each of your creditors will be notified that you have filed bankruptcy and yielded a chance to reply. A meeting of the creditors, a 341 meeting, will be called within 20-40 days of filing the petition. During this group meeting, the bankruptcy trustee and your creditors may ask you questions under oath about your debts, assets, income, expenses and your ability to pay. Within 10 days of the meeting the trustee will rule on whether the case should be presumed as abusive under the means test. If the trustee finds a presumption of abuse you can be forced to file ch 13 instead.
Your assets that are not exempt are then liquidated and profits go to creditors. Once liquidation is completed, you are granted a discharge wiping out your debts.
