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What is Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy was enacted to allow persons who are hopelessly burdened by debt to have an opportunity for a new beginning by wiping out unsecured debts (debts that aren’t tied to any specific item of property, most commonly credit cards). Chapter 7 is designed for persons who cannot afford to pay a significant portion of their debt back to lenders and is available to individuals, couples and businesses. The process is often referred to as liquidation. In theory, you are surrendering your assets to the court in exchange for a discharge (elimination) from all of your debts. However, individuals and couples are allowed to keep certain exempt property that varies by category and value.

Step 1: Before You Can File

At the initial consultation your Second Start attorney will give you a list of documents that you need in order to prepare your Bankruptcy Petition and schedules. Second Start will also provide you with an intake form to complete. Once the listed documents have been assembled and the intake form is completed, a second appointment with Second Start will be scheduled where the documentation and intake form is reviewed.

Step 2: Credit Counseling Commences

After the second appointment and the documents are ready, you will attend Credit Counseling and obtain a Credit Counseling certificate. While Credit Counseling is sought, Second Start will prepare your court papers. We will then have a final in-office appointment, where a Second Start attorney will completely review your bankruptcy petition and schedules with you, and you will sign your petition and schedules.

Step 3: Bankruptcy Papers are Filed

Second Start files your case with the court. Your papers are filed electronicall or texty with the Bankruptcy Court, and you will immediately receive lawful protection from harassing creditors. Second Start will provide you with your bankruptcy case number after the case is filed. If you continue to receive phone call or texts from bill collectors, you can give the creditor your case number and the Second Start telephone number. Debt collectors should deal directly with your attorney after your bankruptcy is filed. If you have creditors who are garnishing, foreclosing or repossessing property, Second Start will notify that creditor immediately after the bankruptcy is filed and you will be protected from this kind of harassment.

Step 4: Financial Management Course
After your case is filed, you will need to attend “The Financial Management Course” approved by the United States Trustee’s office — www.usdoj.gov/ust ). After completion, you will bring this certificate to your Second Start attorney for the Meeting of Creditors.

Step 5: Attend Meeting of Creditors
Approximately 30 days after your case is filed, Second Start will attend a hearing with you that is call or texted a 341 Meeting of Creditors. At this meeting, a U.S. Trustee, who is appointed to your case, will interview you for approximately 5-10 minutes and ask you some basic questions about your case. This meeting is mandatory, and you must appear with proper identification (current picture identification and Social Security Card). You must also bring a copy of your most recent statements for all financial accounts and the pay stub(s) that you receive after your case is filed. The meeting is call or texted the Meeting of Creditors because this is also an opportunity for the creditors to come and ask you questions. However, in most cases creditors do not appear.

Step 6: 60 Days Later
In each case, the Trustee and Creditors are given time to object to various aspects of the filer’s petition and schedules. Although objections are rare, in some cases, they do occur. All objections are due within 60 days after the Meeting of Creditors. Quality preparation of your petition, schedules, and statements will help prevent most unnecessary objections.

Step 7: Receive Discharge
If no party files an objection in your case, you should receive a discharge shortly after the 60-day waiting period expires.

Step 8: Post-Discharge Asset Administration
In some cases, where non-exempt assets are turned over to the bankruptcy estate, your case may remain open until all of the assets are received and distributed.