A Timeline of the Process of Filing Chapter 7 Bankruptcy
A Timeline of the Process of Filing Chapter 7 Bankruptcy
1) Provide Complete Information to your Bankruptcy Lawyer
Once you have chosen a lawyer who will represent your bankruptcy case, you will need to provide documentation regarding all of your debts, your current net worth (requires showing your bank account information) and all of your liabilities including alimony payments you are making, car payments, other loans and mortgage information. You will also be required to show your income from all sources for the past 6 months.
2) Attend Credit Counselling sessions
You will be required to attend at least 2 credit counselling sessions because it is a requirement of the chapter 7 bankruptcy process. The purpose of these classes is to teach you to be financially responsible and to live within your means so you do not end up in this same bankruptcy mess again. Topics you will learn about include financial budgeting, money management, financial literacy, housing costs maintenance (if you own a home), manage debt, use credit cards responsibly, etc.
3) Review Petition and Sign Forms
A bankruptcy petition is filed with the US bankruptcy court and initiates your bankruptcy case for processing, and for ultimate discharge. In other words, a bankruptcy petition is a request for seeking protection from the US bankruptcy laws and is submitted to the court. Before submission though, you must meet your bankruptcy lawyer a second time and finalize all details.
4) Bankruptcy Petition is Filed and Case # is Provided
After a week of your confirmation with your lawyer, the bankruptcy petition will be filed with the courts and you will receive a case number. Once you have a case number, you will be asked to attend a 2nd credit counselling & financial education session. This must be done prior to your first bankruptcy court hearing.
5) Automatic Stay goes in to Effect
After your case number is provided, an automatic bankruptcy stay goes in to effect. This automatic stay prohibits creditors and collection agencies from contacting you or taking any legal action against you, except for certain secured debts. In fact, creditors are not even permitted to call you at this point.
6) Notice from Bankruptcy Court
After your bankruptcy petition has been filed with the court, you will receive a notice of hearing within 30 days.
7) Hearing at the Bankruptcy Court
You will need to attend a court hearing where the bankruptcy trustee will ask you a series of questions regarding your case. It is the lawyer's job to prepare you for this interview and make sure you have answers ready to give to the trustee. From past experience, most bankruptcy court hearings are 10 minutes or less.
8) Reaffirming your Debts and Keeping Property
Whilst in your interview with the bankruptcy trustee, if there are any debts that you would like to reaffirm' meaning you would like to keep the property that is secured against those debts, you will need to inform this to the trustee and sign a reaffirmation agreement.' This therefore means you will have to sign a repayment schedule with that creditor and you will usually be offered a low interest rate if it is your loan or car payment.
9) Bankruptcy Discharge
Two months after your court hearing, you will receive a notice of bankruptcy discharge from the US bankruptcy court. At this point, your case is over and you are relieved of all the debt that was claimed in the petition; except those debts that you choose to reaffirm.
There you go, this is a list of steps you should expect to go through while under your chapter 7 bankruptcy. Please note that each bankruptcy case is unique and you may be required to go through additional steps if your case is more complicated; talk to your lawyer on your specifics.
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