Once you have considered your debt relief options, and decided to file Chapter 7 bankruptcy it's important to know the process and timeline involved. If you should have not yet spoken with a bankruptcy attorney, you should as soon as possible. As important as it is to understand the bankruptcy process, every case is unique but similar in nature.
While every Chapter 7 bankruptcy case is unique and requires different legal decisions along the way. Your bankruptcy attorney should be able to explain more about pre - planning for bankruptcy and what to expect when you go to bankruptcy court. Until then we have outlined the bankruptcy process and timeline below:
1. Provide Your Bankruptcy Attorney with Your Financial Information
After having an initial consultation and have decided on an attorney you will need to gather documentation and income verification for the past six months. Your bankruptcy attorney should also pull a credit report to verify debts and amounts.
2. Get Your Credit Counseling Class Completed
If you file bankruptcy of any type you are required to take a credit counseling class. Typically this can be done online and the fee is approximately $30.00. You are required to complete this class prior to filing bankruptcy. Some bankruptcy attorneys will offer discount vouchers for these classes. The credit counseling is educational and should take one to two hours.
3. Review and Signing of Your Bankruptcy Petition
Your attorney will prepare your petition to file bankruptcy. Once he/she does you will need to review and assure it's accuracy. Once that is done you will sign your petition so it may be filed with the bankruptcy court. It's important to make certain all your debts are included so they are properly discharged.
4. Your Petition Gets Filed and a Case Number Provided
Typically it takes about a week after signing your bankruptcy petition for it to be filed with the court, then you will receive your case number. Once you have a case number, you will be required to attend another educational course. This should be done prior to you 341 creditors hearing.
5. Your Automatic Stay
Your automatic stay goes into effect once your bankruptcy is filed. This protects you and stops all creditors from making any attempts to collect money or repossess property from you. Your creditors cannot even continue to call you at this point trying to collect on past due debts.
6. Notice From Bankruptcy Court
Now that your bankruptcy petition has been filed in the court, the court will send a notice informing you of your hearing date. In most county's the hearing will take place about 3 to 4 weeks after your petition filing. You must make certain to mark your calender and be on time for your creditors hearing.
7. Bankruptcy Court 341 Creditors Hearing
You will be required to appear before the court for a creditors hearing. The bankruptcy courts trustee will ask you a series of questions. The hearing typically last only about 10 to 15 minutes in most cases. Your bankruptcy attorney should prepare you for these questions and it should be relatively painless
8. Keeping Property (Reaffirming Debt)
At your 341 hearing any debts that you would like to “reaffirm”, meaning you would like to keep the property, you will need to sign a reaffirmation agreement. Meaning, you will agree to a repayment plan with the creditor. Often times a discounted rate will be offered in order to help you, such as a car or RV payment.
9. The Bankruptcy Discharge
About two to three months after you court hearing, you will receive a discharge notice from the court. At this point, your bankruptcy case is over and your debts are discharged for the exception of reaffirmed debts. This is when you may start reapplying for credit.
Once you have considered your debt relief options, and decided to file Chapter 7 bankruptcy it's important to know the process and timeline involved. If you should have not yet spoken with a bankruptcy attorney, you should as soon as possible. As important as it is to understand the bankruptcy process, every case is unique but similar in nature. While every Chapter 7 bankruptcy case is unique and requires different legal decisions along the way. Your bankruptcy attorney should be able to explai
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