The most common and simplest form of bankruptcy is chapter 7 bankruptcy. The basic idea behind it is that the bankruptcy committee which is appointed to your bankruptcy case will sell your property and will pay off the creditors and will also end with a discharge of qualifying debt, for example, medical debt, credit card balances, and also the personal loans you have taken
The entire bankruptcy project usually takes 4 months to complete and move through the particular process without any hitch. However, the timeline varies for everyone.
5 Basic Steps To Follow Filing A Chapter 7 Bankruptcy
Now, you have a basic idea about what chapter 7 bankruptcy actually is. It is time to dig into the main topic and find out the steps you need to take for filing a chapter 7 bankruptcy.
Handling everything on your own is too much, so we will suggest you contact one of the best bankruptcy experts at the Law Offices of Mark L. Miller. For now, let’s check out the steps now.
Step 1: Analyze Your Debt And Determine Your Property Exemption
When you are thinking about filing a chapter 7 bankruptcy, the first thing you need to do is analyze your debt. Some forms of debts, for example, most student loan balances, child support obligations, and also recent tax debt, are not at all dischargeable in chapter 7 bankruptcy.
In case, for a debt, you pledge collateral for a debt, like a car or a house, the creditor can always take the property. In case you are not current when you are filling and after your case, if you do not remain current, it can happen.
Each state has different exception laws to dictate which type of property you are eligible for keeping when you are filing for Chapter 7 bankruptcy. These mostly include retirements accounts, household furnishings, a modest car, along with some particular equity in a home.
Before filing, you need to be sure that you will be able to keep everything you want.
Step 2: Ensure You Are Eligible
In chapter 7 bankruptcy, most people not only take but also must pass the means test right before qualifying for a particular discharge. Before you file bankruptcy, you need to check in case your average gross income of yours during the last 6 months is greater than the median income for a specific family of your size in the particular state you will qualify for.
In case that is not the scenario, you will subtract allowed expenses only from your income in order to determine whether you will be eligible to utilize the benefits of chapter 7 bankruptcy or not.
Step 3: Whether To Reaffirm Or To Redeem Secured Debts
For a particular loan, in case you pledged property as collateral, you will be required to continue paying the creditor in case you wish to keep the property. When you are filing for Chapter 7 bankruptcy, you will be questioned whether you wish to redeem the property, reaffirm the debt, or surrender the property.
On the basis of exactly where you live, there could be some other options as well. There are some lenders, who allow the debtors to keep the property, but that too as long as the debtors are remaining current on loan.
Step 4: Fill Out The Chapter 7 Bankruptcy Form
You are done deciding which things you want to consider and whatnot. It is time to fill out a list of pages of the chapter 7 bankruptcy form. In those pages, you need to state all about your debts, property, income, prior transactions, and expenses.
Here, you will also need to list down all your incomes property, the names of your creditors, and list your property exemptions. Plus, you also need to make a decision on what you want to do about your secured debts.
Finally, you will disclose your property transactions, which have occurred up to ten years before you are filing for bankruptcy.
Step 5: Take A Credit Counseling Course And File The Form
Individuals whoever is filing for chapter 7 bankruptcy have to complete a course before they are filing for bankruptcy. You also have an option of doing it shortly after filing the one. When you file your petition, your case will start.
Most individuals prefer to file all the forms, such as your schedules, the main bankruptcy form, and other forms at the same time. However, in case you are out of time, you can go for an emergency filing just by completing a few numbers to the required forms. For filing the remaining forms, you will get a maximum of 14 days.
Complete The bankruptcy Process
These are the steps you need to follow when you are filing Chapter 7 bankruptcy. At the same time, you also need to remember that your job is not done with submitting the forms and papers. There is a lot more to take care of.
- When you are filing your forms, you will also need to pay a filing fee. In case you are not able to pay that at once, you can ask the court to split it into four terms, which might be more accessible for you.
- In order to ensure the accuracy of the information you have provided, you will also be required to submit a number of documents, such as paycheck stubs, forward bank statements, tax returns, profit and loss statements, and some other documents the trustee needs.
- Most bankruptcy cases need the filer to attend a short meeting with the trustee, and for that, you need to visit the court once. The appointed bankruptcy trustee will check your identity and will also ask you some standard questions.
The Final Talks
When you are filing a chapter 7 bankruptcy, it is obvious that you are going through a lot of things. It is also not possible to keep everything on the proper track as the process requires a lot. Opting for a professional is the best thing to do; after all, you need some professional guidance and assistance.
- 5 Major Advantages Of Filing For Bankruptcy According To Legal Experts
- How Does Giggle Finance Work? – A Complete Guide
- 4 Reasons To Buy Health Insurance Before Turning 30
- 4 Businesses Doing a Great Job at Financial Turnaround Strategy