Chapter 7 is the most common way to end debt and the harassment from creditors that comes with the debt. It is also known as “liquidation” or “straight” bankruptcy. Chapter 7 is typically preferred for debtors who are current with their secured payments such as mortgage and car notes, but who are overwhelmed by unsecured debts like credit cards and medical bills.
If you are contemplating declaring a Chapter 7 bankruptcy, it is wise to obtain the services of a competent attorney. He or she will assess your personal situation to determine whether or not Chapter 7 is right for you. To assist in this, there are several items that you need to bring to your first meeting with the attorney. Your attorney will advise you as to which documents may be copies and which must be originals. They include but may not be limited to the following:
- Your state issued photo ID and Social Security card
- Federal Income tax returns for the last three years
- Statements for all bank accounts for the last six months
- Employment pay stubs for the last six months
- Titles and registrations for all vehicles along with written payoffs
- Monthly statements and plan documents for all investments
- Purchase contracts
- Leases or promissory notes
- Bills, invoices, and credit card, loan, and mortgage statements for which you are personally liable
- Deeds and satisfied mortgages for owned real estate
- Divorce documents, if divorced
- Questions, questions, and more questions
Once it is determined that you are going to proceed with filing, the attorneys at Parker and DuFresne will use their experience and knowledge to guide you through the process.
- Your attorney will prepare a bankruptcy petition. All necessary documentation will be gathered and compiled. Under certain circumstances, a “means test” will determine if you are, in fact, eligible to file a Chapter 7 bankruptcy. Your Parker & DuFresne attorney will take the dread out of the process for you.
- Within 180 days prior to filing, you are required to undergo credit counseling with a provider approved by the Court. It can be done in person, by phone, or over the internet.
- Your attorney will file your bankruptcy petition and related documents, including a certificate of completion for the credit counseling. Prior to filing, you should meet with the attorney to review the petition. After acknowledging it as final by signing it, your petition is ready to be filed.
- Once the paperwork is filed, you are assigned a case number, a court appointed trustee, and a date for a meeting of creditors. An automatic stay goes into effect unless you have filed other cases within the last 12 months. From this time forward, your creditors may not sue, pursue, or contact you in any way.
- Your petition is reviewed at the meeting of creditors. It is attended by you, your Parker & DuFresne attorney, the trustee, and any of the creditors who desire to be there. You will be prepared for any questions that might arise.
- Trustees and creditors have 60 days to challenge your right to a discharge. If there are no challenges, in a few months the court will provide notice that your dischargeable debts have, in fact, been discharged.
- After your debts are discharged, it is time to begin rebuilding your financial affairs. Review your post discharge credit reports to make sure that your discharged debts are shown as such. Start saving a part of your paychecks, and get ONE credit card as soon as you can. In time, your credit and your savings will be healthy again.
At Parker & DuFresne we know that the decision to declare bankruptcy can be both difficult and emotional. We also know that it can be a necessary one. Please contact us for a free initial consultation. We will get you back on the road to financial recovery.
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