The Process for Filing Chapter 7 Bankruptcy
Bankruptcy | October 9, 2014
Filing for Chapter 7 bankruptcy is not a very complicated process, however, failure to do it properly can make things more difficult than they need to be. A huge bulk of the process involves filing paperwork with the appointed bankruptcy trustee and attending all court-ordered hearings. Although filing for bankruptcy in Georgia can be done on your own, it is always best to complete the process with a qualified bankruptcy attorney at your side every step of the way.
Filing for Chapter 7 Bankruptcy
There are several mandatory steps that are part of the Chapter 7 process. To give you a better understanding of Chapter 7 bankruptcy filing, we have highlighted each of them here:
- Mandatory Credit Counseling. Before you file a bankruptcy petition or even really start the formal bankruptcy process, it is required that you partake in credit counseling. This must be done six months prior to the official filing of a bankruptcy petition. What makes this part of the process somewhat problematic is that you are required to utilize a credit counseling agency that is approved or certified by the United States Trustee’s Office (USTO). A list of approved agencies can be found on the USTO website at http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm. Once you’ve completed the counseling, you must file a certificate of completion with the bankruptcy court. If you fail to get credit counseling or file a certificate of completion, your bankruptcy case will likely be dismissed.
- Formal filing of the bankruptcy petition. Your bankruptcy case officially starts once you file your bankruptcy petition. Alongside the petition, you must also file a number of schedules that list your financial information, including your income and expenses, to show that you meet the requirements set forth in the Chapter 7 means test, which measures your disposable income to see if you qualify for Chapter 7. An automatic stay goes into effect at this point, which prevents creditors from attempting to collect on any debt.
- The bankruptcy trustee is appointed. After all of the required paperwork is filed, the court will appoint a bankruptcy trustee to oversee the bankruptcy process and the liquidation of your assets. It is the trustee’s job to review all of your paperwork and distribute the proceeds of liquidation to your creditors. It is, however, your responsibility to submit your most recent tax return to the trustee.
- Meeting of the creditors. You will be notified by the court of a meeting of the creditors. At this meeting, you must, under oath, answer questions about your finances and bankruptcy forms.
- Eligibility of Chapter 7 is confirmed or denied. The court makes a decision as to whether or not you are eligible for Chapter 7 bankruptcy based on your submitted paperwork that was reviewed by the trustee.
- Non-exempt property handling. The trustee will determine what property will be sold in order to pay off your creditors. You can negotiate with the trustee at this point to keep certain pieces of property.
- Secured debts are taken care of. You have to return any property that was backed by collateral to your creditors.
- Completion of a financial management course. Before your bankruptcy can be discharged, you must complete a financial management course. Once completed, you must notify the court by filing a completion form.
- Your bankruptcy is discharged and your case is closed. It typically takes anywhere from three to six weeks for a bankruptcy to be discharged. The automatic stay is lifted. Shorty thereafter, the case will be closed and your bankruptcy is over.
Morgan & Morgan has more than 30 years of experience helping individuals just like you successfully file for Chapter 7 bankruptcy and begin to turn their lives around. If you or a loved one is contemplating filing for bankruptcy, contact Morgan & Morgan today for a free consultation with one of our expert bankruptcy attorneys.