Are you drowning in debt, either personally or professionally? Filing for Chapter 7 bankruptcy might be the right solution for you. This will let you pay off debtors without setting up a repayment plan, like in Chapter 13 bankruptcy cases. Instead, the bankruptcy trustee will gather and sell your nonexempt assets and use the proceeds to pay your creditors. However, unlike under Chapter 13 bankruptcy, filing Chapter 7 could result in the loss of property.
Learn more about Chapter 7 bankruptcy, including how it works and who is eligible.
How Chapter 7 Bankruptcy Works
To file Chapter 7 bankruptcy, you start by filing a petition with your local bankruptcy court. According to the U.S. Courts, you will also need to provide the following information:
- A list of all creditors and the amount and nature of their claims.
- The source, amount, and frequency of your income.
- A list of all your property.
- A detailed list of your monthly living expenses, including food, clothing, shelter, utilities, taxes, transportation, medicine, etc.
For individuals who file Chapter 7 bankruptcy due to mainly consumer debt, you will need to provide the court with a certificate to prove you underwent credit counseling. You will also need to submit a copy of a debt repayment plan that was set up during your counseling sessions. You may also be asked to provide a monthly net income statement, and a list of any expected income or expenses after filing.
If you are married, you may file a joint Chapter 7 petition, but you will need to follow all the same requirements as individual filers. If only one spouse is filing, the income and the expenses of the other spouse are still required so the court can determine the household’s total financial situation.
After you submit your paperwork, your case then moves forward.
Several weeks after filing, the case trustee will hold a creditor’s meeting that you will be required to attend. During this meeting, you will be asked questions about your property and financial affairs. The trustee will also ask questions to ensure you know the potential consequences of filing bankruptcy, including how it will affect your credit history.
Once you file Chapter 7, collectors can no longer try to collect from you. This includes initiating or continuing lawsuits, wage garnishments, or phone calls demanding payment.
Who’s Eligible for Chapter 7 Bankruptcy
Individuals, partnerships, and corporations are all eligible to file Chapter 7 bankruptcy. You may file no matter what amount of debt is owed. However, you cannot file if you had a previous bankruptcy petition dismissed within 180 days because you willfully failed to appear before the court, or if you failed to comply with court orders.
To be eligible, you also must receive credit counseling, as stated above.
Contact a Chapter 7 Bankruptcy Lawyer
To learn more about filing Chapter 7 bankruptcy, it’s crucial to hire an experienced attorney to help you through the process. Don’t let debt ruin your life. Call (405) 529-9377 for a free case review.