Chapter 7 

What Is Chapter 7 Bankruptcy?

This type of bankruptcy is considered to be a “fresh start” because you can wipe out your debts and start anew. Chapter 7 is a liquidation bankruptcy. Should you decide to file for chapter 7 bankruptcy, a trustee will collect all of your assets and sell any that are not exempt. Our attorney is aware of the exemptions in New York State and under federal law.

After the sale of all non-exempt assets, the proceeds are distributed to your creditors with a commission taken by the trustee for carrying out the distribution. Keep in mind that this type of bankruptcy will only wipe out debts from unsecured assets. Secured assets, like your home and vehicle (assuming they are not paid off), will still have their loans attached to them. However, as long as you keep up with the payments for these loans, you should be able to keep the property.

How to File for Chapter 7 Bankruptcy

If you are wondering how to file for chapter 7 bankruptcy, or even if chapter 7 bankruptcy is right for you, the first thing you should do is contact a reputable bankruptcy attorney. While it is possible to file for chapter 7 on your own, it is very difficult for a layperson to do. Worse, making a mistake could jeopardize your chances of a successful filing.

If you choose to undertake this on your own, here are some of the steps you might have to take:
  • Determine whether you qualify. Chapter 7 bankruptcy is “means-tested,” which means it is only available to debtors under a certain income level. In order to find out whether you qualify, you need to fill out a number of forms from the U.S. Courts website.
  • If you qualify, fill out the appropriate bankruptcy forms and file them with the court. These forms will require you to list all of your property, income, expenses, and debt for the court. It is essential that you are accurate and truthful in these documents.
  • Receive your bankruptcy trustee. The court will assign a trustee to you. He or she will work on behalf of your creditors to verify the information in your documents, gather up your non-exempt assets, and liquidate (sell) them so that your creditors can be paid back.
  • Complete credit counseling and/or debtor education. These steps are required by law, as the government wants to prevent people who file for bankruptcy from having to do so again.
  • Attend the 341 meeting. This meeting generally takes place in the office of the trustee. You, your creditors (or their representatives), and the trustee will meet together. Your creditors will ask you questions about your property and debts. During this meeting, the trustee will also arrange to sell your non-exempt assets.
This process can be lengthy and confusing. The best thing to do is always to contact a bankruptcy lawyer like Lawrence Stuart. He can help you through the process, determine if you qualify, and represent your rights before the trustee and creditors.

Meet with a Bankruptcy Lawyer at Lawrence Stuart Today!

Before you try to file on your own, you should at least speak to an attorney. Call today to schedule a consultation with Lawrence Stuart.
Share by: