The Facts About A Chapter 7 Bankruptcy
Chapter 7 bankruptcy is designed to eliminate debt. It is often referred to as a “straight” bankruptcy or a “liquidation” bankruptcy. It is known as such because the trustee assigned to the case can sell any nonexempt or unprotected assets and pay the money to your creditors.
However, it is important to understand that most property is protected by an exemption under state law. When an asset is exempt, a bankruptcy trustee cannot take the property. In a Chapter 7 Bankruptcy, the majority or all of your unsecured debts are discharged (which means that you are no longer liable for the balance owed to the creditor).
What Does The Chapter 7 Bankruptcy Process Look Like?
The purpose of filing a Chapter 7 bankruptcy is to discharge a debt or to cancel some debtor obligations (although it is important to understand that some debts cannot be discharged in a Chapter 7 bankruptcy). Once a Chapter 7 bankruptcy has been filed, the debtor will immediately be protected against attempts by the creditors to collect on the debts.
Here is basically how the process works:
1. After a debtor files a Chapter 7 Bankruptcy, a 341 hearing (otherwise known as a “Meeting of the Creditors”) is scheduled approximately 4-6 weeks later. In reality, it is quite rare for a creditor to appear at this hearing but this is the one chance that they have to do so once a bankruptcy proceeding is pending.
The format of these proceedings has recently changed and they are held via Zoom. I have found that this format change is much more convenient and less stressful and time consuming for the parties involved.
2. The court appearance via Zoom is conducted by a trustee assigned to your case. The “meeting of the creditors” is conducted by a trustee. The trustee is not a judge but is an official appointed by the court to oversee the meeting and to ask the debtor a series of questions.
3. The debtor’s attorney will also be present at this meeting, and the attorney will prepare the debtor with the questions that can be expected to be asked at this proceeding. This process usually only takes a few minutes.
4. Approximately 60 days after the court hearing, the Order of Discharge will be entered by the Court.
As your attorney, I will represent your interests. I will also offer personal attention to you and your case. As a sole practitioner, I offer flexible and accessible bankruptcy representation. Chapter 7 bankruptcy is the best way to move forward quickly. However, some people earn too much to qualify or they have a secured asset (such as a house or car) that they have fallen behind on in payments and they need extra time to catch up and become current.
Get Your Questions Answered
I want to ensure that you get all of your bankruptcy questions answered. This is part of the reason I offer an initial consultation at no charge. It is your opportunity to ask questions, get to meet me and gain a stronger understanding of the process. Call 712-847-5882 or send me a brief email summary of your situation, and I will get in touch with you.
I am a debt relief agency. I help people file for bankruptcy relief under the Bankruptcy Code.