Step 1: Bankruptcy Consultation
Chapter 7 Bankruptcy helps many people get a fresh start. However, it is not a solution for everyone. To determine whether you are eligible to file for a Chapter 7 Bankruptcy and whether bankruptcy will accomplish your goals, it is important to seek advice from a bankruptcy attorney who practices in the court for your area.
Step 2: Retainer Appointment
Once your attorney has determined that you are eligible for a Chapter 7 Bankruptcy and that the protection you are seeking from your creditors is available under Chapter 7, a retainer appointment is needed to review the terms of representation.
Step 3: Pre-Bankruptcy Credit Counseling
The Bankruptcy Code requires that you have a consultation with a credit counseling service before filing for Chapter 7 Bankruptcy. The credit counseling agency will discuss your income and living expenses along with money saving ideas to help you in the future. You are then issued a credit counseling certificate that is valid for 6 months. This certificate serves as an "admission ticket" to the Bankruptcy Court.
Step 4: Signing Appointment
At the Signing Appointment, you will review a series of documents your attorney will have prepared for filing your bankruptcy case. These documents summarize your assets, your debts, your income, your living expenses, and major financial transactions for you over the last two years. By signing these documents, you will authorize your attorney to file your case with the Bankruptcy Court. Having an experienced bankruptcy attorney prepare your bankruptcy petition and related bankruptcy documents ensures that your assets and income are protected and that your bills are properly discharged in bankruptcy.
Step 5: Notifying Your Creditors
Your bankruptcy case will be filed with the United States Bankruptcy Court after your Signing Appointment. Your case will then be assigned a Case Number by the Bankruptcy Court. This is your proof that you have filed for bankruptcy. If any creditor calls you after your case is filed, you can provide them with your Case Number, and the harassing phone calls should stop. However, the Bankruptcy Court will also send written notice of your bankruptcy to all of your creditors.
Step 6: Meeting of Creditors
After your Chapter 7 Bankruptcy is filed, the Bankruptcy Court will assign a Chapter 7 Trustee to your case. This individual acts like watchdog for your creditors and conducts a hearing called a Meeting of Creditors at the Bankruptcy Court. The Meeting of Creditors typically happens about one month after your case is filed. At the meeting, your attorney will review your financial records and asset information with the Chapter 7 Trustee. In some instances, the Trustee may require more than one court appearance, to provide additional financial information. However, for most clients, the Meeting of Creditors is their only trip to court. Following the Meeting of Creditors, creditors and the Trustee have approximately 60 days to file objections and take other steps in your case.
Step 7: Debtor Education Course
A second credit counseling component is required to be completed by all Chapter 7 debtors within 60 days after their Meeting of Creditors. You will need to use a licensed credit counseling agency to complete the debtor education program. You will watch some video clips online about managing your finances, answer questions related to the videos, and receive another certificate from the credit counseling agency. Your attorney then files your certificate with the Bankruptcy Court.
Step 8: Discharge Order
If there are no other legal disputes in your case, and if you complete your credit counseling on time, the earliest you would receive a Chapter 7 Discharge Order from the Bankruptcy Court is 60 days after your Meeting of Creditors. Not everyone is entitled to a Bankruptcy Discharge, and not all debts are automatically discharged in bankruptcy (child support obligations, for example, are not discharged). Your Discharge Order, signed by a federal bankruptcy judge, will be forwarded to all of your creditors. This is usually the final step in your Chapter 7 case. A bankruptcy will remain on your credit report for another 10 years after your filing.