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Are you going through bankruptcy, and you need to file for a Chapter 7 Bankruptcy? However, you do not know what are the steps for filing for Chapter 7 bankruptcy? No worries, because in this blog, you will learn and discover the steps for filing Chapter 7 bankruptcy. Filing for bankruptcy is one of the most frustrating and stressful events you can go through in life, as it can be overwhelming.
But for individuals like you, going through it can offer you a path to a fresh financial start. This is because filing for Chapter 7 bankruptcy will help you in discharging many unsecured debts.
The Step-by-Step Process of Filing for Chapter 7 Bankruptcy
Here are the steps you can follow when you file for Chapter 7 Bankruptcy.
- Gathering of Your Financial Documents
Firstly, before you file for Chapter 7 bankruptcy, you need to do an inventory of your finances. You have to gather your recent pay stubs, tax returns for the last 2 years, bank statements, a list of all debts, a list of assets, monthly expenses, and living cost statements because these will be the basis of the bankruptcy forms you must file. - Taking the Mandatory Credit Counseling or Budgeting Course
Secondly, you will have to complete a credit counseling session that is required by federal law and have it approved by a provider within 180 days before filing. This course will help you determine whether bankruptcy is right for you or if alternative debt relief is better. After the course, you will need the certificate of completion to include with your petition. - Completing the Bankruptcy Forms or Petition
Thirdly, you need to complete and file a packet of approximately 23 official federal forms that disclose your financial picture, which includes your income, assets, debts, expenses, and exemptions. The forms included are voluntary petition, schedules of assets and liabilities, statement of financial affairs, means test forms (to test eligibility), exemption schedules, and other local court forms. - Paying the Filing Fee
The fourth step is to pay for the standard court filing fee for a Chapter 7 petition, which is worth $338 in many districts. Take note that if you cannot afford to pay the full fee, you can apply to pay in installments or even request a fee waiver, depending on your income and local rules. - Filing the Petition with the Bankruptcy Court
The fifth step in filing for bankruptcy Chapter 7 is to file the petition in a court. You and your lawyer will submit the completed petition and accompanying schedules to the clerk of your local bankruptcy court. Then, the clerk will file it, assign a case number, and your case officially opens. - Serving or Providing Documents to the Trustee and Creditors
The next step will be to service or provide documents to the trustee and creditors. The courts will require you to send certain documents to the Chapter 7 trustee assigned to your case and also to your creditors. The documents may include a copy of your tax returns, pay stubs or income statements, or other verification of your financial disclosures. - Taking the “Debtor Education” or “Financial Management” Course
Before you receive your discharge, the seventh step will be to complete a post-filing debtor education course, which is distinct from the pre-filing counseling. And then, you will have to file your certificate of completion with the court. - Attending the 341 Meeting of Creditors
The eighth step is that about 20 to 40 days after filing, you will have to attend what is known as the “341 meeting”, or meeting of creditors. Wherein the trustee and any creditor may ask you basic questions under oath about your financial disclosures. - Trustee Review and Liquidation
The ninth step is that the trustee will review your case, including your assets and exemptions. If you happen to have non-exempt assets, your trustee may liquidate and sell them to bring value to creditors. But many Chapter 7 filers never lose property, as they fall fully within the exemption limits. - Final Approval and Discharge
Finally, the last step would be when everything is in order, and the court grants you a discharge of your eligible debts. Meaning, your debts will be eliminated, and your creditors can no longer pursue you for them. Once discharged, your case will then be closed.
In Conclusion,
These are the step-by-step procedures when filing for bankruptcy Chapter 7. If you are stressed about your debt and pursued by your creditors, do not hesitate to contact, avail of the services, and file for a Chapter 7 Bankruptcy with your lawyer, who is an experienced bankruptcy attorney, can help you understand your situation and act accordingly to avoid further problems in the future, and assist you in filing your case.
