Chapter 7 Bankruptcy Information
There are currently two chapters for personal bankruptcy in the united states, one is called chapter 7 and the other one is chapter 13. Chapter 7 is normally for people who have more unsecured than secured debt. If you have a lot of secured debt then a chapter 13 bankruptcy is possibly the best way to go. In 2005 the chapter 7 bankruptcy law changed and now before allowing you to file for bankruptcy you have to have a means test.
This test varies from state to state, but the main criteria is that if your household income is less than that of your area then you can normally file for chapter 7 bankruptcy. Once it has been agreed that you can file for bankruptcy then there are further stages to go through.
Prior to filing your case you should expect obtain some counselling to help with the information that the courts will require. This normally consists of a survey about the following.
Current Income
Household expenses
Overall debts
This normally takes about 30 minutes to complete and can be done over the phone with a court approved agency.
Next you need to meet with your attorney who will go through the chapter 7 bankruptcy forms with you. These forms are normally about 50 pages long and you will have to itemize the following.
Assets
Debts
Income
Expenses
There are also a variety of other financial questions that you will need to answer to complete the application process. These forms are very detailed and you will have to sign them under oath.
Once your case has been filed then there are two remaining steps that have to be completed. The first step is to complete a two hour financial management class, this can be done either online or in person. The subject matter of this class is about household budgeting and financial management. The last step that you have to take is attending a meeting which will hear your case. For a majority of chapter 7 cases you will not have to face your creditors, instead a representative of the bankruptcy court will ask you questions relating to your case. The total time from start to finish of this process normally takes between 4 to 5 months to complete.
Please remember that this is not the easy way out of paying your debts and there maybe further problems with getting credit at a later date.
Remember you must take the appropriate legal advice before entering into any bankruptcy or other debt reduction programs.
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