What to Expect when Filing a Chapter 7 Bankruptcy
Jan. 16, 2021
If you are considering filing a Chapter 7 Bankruptcy, you are probably wondering what to expect during your case. The following is a brief roadmap of what to expect in a typical Chapter 7 Bankruptcy Case. No two cases are the same, so it is important to work with an attorney to understand what to expect in your case and how your case may differ from a typical case.
Information Needed to Prepare a Chapter 7 Bankruptcy
At Treguboff Law, PLC you will be required to complete a client questionnaire and provide the following documentation to begin preparing your Chapter 7 Bankruptcy petition:
· Your last 2 years of state and federal tax returns
· Your last 6 months of paystubs, commission statements or other proof of income
· Your most recent mortgage statement
· Your most recent vehicle loan statement
· The last 6 months of bank statements for each bank account including checking, savings, credit union and money market accounts
· The most recent statement for all 401k, IRA and other retirement and investment accounts
· Copies of the registration and/or title to all motor vehicles
· The most recent statement or correspondence from each creditor
Depending on the complexity of your case, additional information may also be required. We will also pull a credit report to compare with your creditor statements to ensure all creditors are listed.
The bankruptcy code also requires you to take a pre-filing credit counseling course. The pre-filing course can be completed online or over the phone and can generally be completed in about 60-90 minutes. You will also be required to take a second course after the find of your case. We will provide you the information necessary to complete each course.
After you have provided the necessary documentation, we will prepare your bankruptcy petition and set up a time to review it with you. After you have carefully reviewed and signed your bankruptcy documents with an attorney, we will set your case for filing.
Once your case is filed, we will provide you with your case number, the name of the Chapter 7 Bankruptcy trustee assigned to your case, and the date and time or your meeting of creditors. After the filing of your case, you will receive a questionnaire and document request from the Chapter 7 trustee. The Chapter 7 trustee is appointed by the bankruptcy court to administer your case. Think of the trustee as the referee: the trustee will make sure you have provided all required information and turned over any non-exempt assets. The trustee will liquidate any non-exempt assets and send the proceeds to your unsecured creditors. You must provide the Chapter 7 Bankruptcy trustee with all required documentation at least 7 days prior to your meeting of creditors. We will assist you in getting all required documentation to the Chapter 7 trustee.
Meeting of Creditors
You will have a meeting of creditors about 30-45 days after the filing of your case. This meeting is also referred to as a 341 Hearing. When your case is called, the trustee will place you under oath and ask you a series of questions to verify the information in your petition and will also let you know if there are any other documents or information needed. The trustee will then allow creditors to ask you some questions; however, creditors rarely appear. Your appearance is mandatory, but we will appear with you at the meeting of creditors and any other hearings necessary for the reaffirmation of your vehicle.
The Chapter 7 Discharge
The court will issue your Chapter 7 Discharge about 90 days after the initial meeting of creditors; however, your discharge is not the end of your case. Your trustee may need to administer/liquidate a non-exempt asset which will cause your case to stay open after the entry of your discharge. The court will close your case after the trustee completes the administration of your case. You must comply with any document requests or turnover orders after the entry of your discharge. For example, you will be required to provide the Chapter 7 Bankruptcy trustee with a copy of the tax returns for the tax year in which your Chapter 7 Bankruptcy is filed. You also may be required to turn over any tax refunds for the tax year in which your Chapter 7 Bankruptcy case is filed. Your failure to provide the trustee with the required tax returns or turn over certain tax refunds can result in the loss of your discharge
Administration of Your Case
The Chapter 7 Bankruptcy trustee will liquidate and administer non-exempt assets to your unsecured creditors. Many Chapter 7 Bankruptcy cases are “no asset” cases, meaning there are no non-exempt assets to turnover. However, do not be surprised if you are required to turn over a tax refund or some other non-exempt asset to the Chapter 7 trustee. Non-exempt assets are what you give up in exchange for your bankruptcy discharge.
If your case is a “no asset” case, it will close it out relatively quickly. If there is an asset to administer, your case can stay open for over a year. The administration of your case is controlled by the Chapter 7 Bankruptcy trustee, but your attorney will be with you to keep you informed about your case and any duties and obligations you have.
If you would like to learn more about how a Chapter 7 Bankruptcy may benefit you, contact Treguboff Law, PLC today.