An Overview of Chapter 7 Bankruptcy

Before deciding whether to file for bankruptcy and whether to file under Chapter 7 or Chapter 13, you should strongly consider consulting an experienced College Station bankruptcy lawyer. A bankruptcy lawyer can assist you with the complex calculations of the means test that all debtors are required to complete and advise you of which type of bankruptcy best meets your needs.

Here is an overview of what you can expect if, you decide to file a Chapter 7 bankruptcy.

Prefiling credit counseling. At least one day and no more than six months before filing, you will need to complete a credit counseling session of at least 90 minutes. The counseling must be provided by an approved agency. On completion of the counseling you will receive a certificate of completion that will need to be filed with the bankruptcy court.

Filing. Your Chapter 7 bankruptcy case officially begins when your Bryan bankruptcy attorney files your papers with the bankruptcy court. Your attorney will prepare the necessary papers, which include your petition; a list of your creditors names and addresses (the “matrix”); your means test calculations; and schedules listing all your property, any property you claim as exempt, your secured and unsecured creditors, and your current income and expenses.

Order for relief-the automatic stay. After your papers are filed, the court clerk prepares an order for relief and sends it to all creditors listed on the matrix. The order of relief advises your creditors that you are under bankruptcy protection and they must cease all collection efforts.

The trustee. A trustee will be appointed to take possession of any nonexempt property you may own (the property you may not keep), sell the property, and distribute the proceeds among your creditors. In most Chapter 7 cases, the debtor does not own any non-exempt property so there is no property for the trustee to sell.

Meeting of creditors. The meeting of the creditors (also called the section 341 meeting) will be held around five or six weeks after you file for bankruptcy. You must attend. The purpose of the meeting is to allow the trustee to determine whether you have any non-exempt assets that can be used to pay creditors. The trustee will put you under oath and ask you some questions about your finances. Most meetings last only ten to fifteen minutes and are held in the trustee's hearing room. For most Chapter 7 cases, the meeting of the creditors is the only time the debtor has to appear.

Financial management course. Before you can obtain a discharge, you must complete a financial management course approved by the U.S. Trustee. After finishing the course, you file a certification of completion with the court. The form must be filed within 45 days after the first meeting of creditors.

Discharge. When all nonexempt assets of the bankruptcy estate are exhausted, the trustee will file a final report, and you will be discharged from all dischargeable debts. A Chapter 7 bankruptcy proceeding usually takes about six months to complete, assuming no major complications arise. A bankruptcy discharge erases all dischargeable debts included as part of the bankruptcy case.

The College Station bankruptcy lawyers at the Peterson Law Group are available to assist you with all aspects of your Chapter 7 bankruptcy. If you would like to meet with one of our experienced Chapter 7 bankruptcy lawyers, call 979-703-7014 to arrange for an initial consultation.