Basic Steps of Filing a Chapter 7 Bankruptcy

1. Make a list of your debts and analyze it. Debts like student loan and domestic support obligations are not dischargeable in Chapter 7 bankruptcy. If you have a secured debt, the creditor can take the property in order to get the payment of your loan.

2. Find out what assets you can keep. Every state has its own bankruptcy exemption laws. They determine which property you can protect if you file for Chapter 7 bankruptcy.

3. Make sure you are qualified to file for Chapter 7 bankruptcy. Not everyone is eligible to file for Chapter 7 bankruptcy. For instance, if your net income is enough to finance a Chapter 13 repayment plan, you will not be able to file for Chapter 7 bankruptcy. The means test determines if you are eligible to file. Your average income within the past six months should be lower than the average income for a family of your size in your state.

4. Contemplate on what you want to do with your secured debts. When you file for bankruptcy, you will have to decide whether you wish to redeem the secured property, reaffirm the debt or surrender the property. You may have other choices depending on your state residence.

5. Prepare your bankruptcy petition properly. You need to fill out a few dozen pages of the bankruptcy forms. This is where you make a statement of all of your income, expenses, assets and debts. You also have to make a list of all your creditors, take note of the debts being disputed, claim for exemptions, and choose what happens to your secured debts.

6. File your bankruptcy petition to officially commence your case. You can file all the paperwork at once, but if you can’t, you can submit the two-page form first and then submit the rest within 15 days.

7. Attend the creditors meeting. Usually, you only need to show up at the court once to meet with the bankruptcy trustee and your creditors if they you come. At the meeting, your case will be reviewed and you will answer any questions regarding the information in your forms.

8. Address any objection to the bankruptcy discharge. Most debts are wiped out at the end of the Chapter 7 bankruptcy. However, the bankruptcy trustee or creditors can challenge your debt discharge or your entire bankruptcy case. You have to settle all the objections before the bankruptcy case is closed.

9. Settle your secured debts. Upon filing for bankruptcy, you filled up a form where you wrote how you will take care of your secured debts. You must act on these things before you exit bankruptcy.

10. Receive your bankruptcy discharge. This is the absolute goal. After completing bankruptcy, the court will issue an order to officially discharge your debts. This will relieve you from all the legal obligations to pay the discharged debts and the creditors will have no right to demand payments from you.


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