Chapter 7 – Starting Your Case
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1. Credit Counseling Before Filing for Bankruptcy
a. The majority of Chapter 7 cases are people with primarily consumer debts (for example, credit card debt). Prior to filing for Chapter 7 Bankruptcy, the Debtor must complete a credit counseling course. This course can be completed over the phone, in person, or online and should last somewhere between 60 and 90 minutes. You must take this course from an approved credit counseling organization. We here at VMW law can assist you in scheduling the course, as well as lead you through the entire Chapter 7 Bankruptcy process.
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2. Filing the Petition
a. The real process begins when the Petition is filed. It is then when an Automatic Stay is placed on all attempts to collect on debt and things really begin to get going. Where you file the Petition is dependent on where you live or where the business debtor has its principal place of business. The New York Bankruptcy Attorneys here at VMW Law can help you in determining where to file.
b. Filing does require a fee of around $300. However, in extreme cases this fee can be waived or in some instances you may be approved to pay the bankruptcy filing fee in installments. The Bankruptcy Attorneys here at VMW law can help you determine whether you qualify for a bankruptcy fee exemption or installment payment.
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3. Other Documentation
a. The Petition is not the only thing you file in your Chapter 7 Bankruptcy case. A series of schedules must also be submitted to the court that document everything from all of your assets and all debts owed and your monthly budget which includes all income and expenses. Also, you will be required to submit a Statement of Financial Affairs that require documentation of numerous aspects of your financial life, from last payments made to creditors to any judgments a court has rendered against you.
b. You also have to provide proof of income. This is usually in the form of paystubs, income statements, etc., from 60 days of when you file. You also must provide IRS Tax filings for the two previous years. And, if you are married, but filing separately, you still must nonetheless provide income information from your spouse.
c. It’s a lot of information, but the Bankruptcy Attorneys here at VMW Law can assist you in putting all of it together. The key to a successful Bankruptcy filing is being prepared and making sure you have everything in order to speed up the process and get your debt discharged.
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4. So you’ve filed. Now what?
a. Several things happen. First, an automatic stay comes into effect. The automatic stay allows the debtor to press pause on most efforts in collecting on debt. What does this mean? Bankruptcy can stop your car from being repossessed. It can stop your house from being foreclosed. It will also stop phone calls from creditors looking to get payment. The automatic stay is an important part of Bankruptcy, and the Bankruptcy Attorneys here at VMW Law can help you ensure that creditors adhere to it. A creditor could however, seek relief from the automatic stay. It is therefore important for you have good legal guidance before and after you file for bankruptcy.
b. An estate is created of all of the Debtor’s assets and a Trustee is assigned to oversee it. Because Chapter 7 is considered liquidation bankruptcy, the Trustee has the power to liquidate assets in efforts to pay off the Debtor’s obligations. However, not all assets MUST be liquidated. You can find frequently asked questions regarding this here.
c. Twenty to Forty days after you file for Chapter 7 Bankruptcy, you are required to attend a 341 meeting with the Trustee assigned to your case. You can find more information about 341 meetings here.
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Prior to discharging of your debt, you have to go through another counseling session with an approved credit counselor. The New York Bankruptcy Attorneys here at VMW Law can help you in choosing and picking a credit counseling organization.