June 20, 2024

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Filing Chapter 7 Bankruptcy – Liquidation

3 min read

Filing Chapter 7 Bankruptcy – Liquidation

There are a many kinds of bankruptcy in the United States of America. It is often difficult to select the one that suits your needs. Before deciding the kind of bankruptcy, it is important to understand all your options. This guide will help you file for Chapter 7 bankruptcy which aims at liquidation.

1. Determine your best option.

Consider bankruptcy to be your last selection. This choice should be selected only if all other possibilities have exhausted.

2. Chapter 7 Bankruptcy qualification.

You may qualify for Chapter 7 Bankruptcy based on your family size, income and other laws of the state that you are filing in. A federal form called “The Means Test” must be duly filled. If you don’t qualify, debt consolidation is the only choice.

3. Consult a bankruptcy attorney.

The bankruptcy attorney will serve you determine if chapter 7 suits you the excellent. The attorney will advise you through the whole procedure.

4. Mandatory credit counseling.

Credit counseling costs $30 to $50 but it may be free in definite situations. A petition filed without the mandatory credit counseling can be dismissed earlier the release is obtained.

5. Complete other necessary paperwork.

Along with the petition, a list of liabilities and assets, current income, all loans to be applied for bankruptcy, unexpired leases and executory contracts, and an inventory of exempt assets, must be filed to avail bankruptcy benefits.

6. Filing a complete petition with the bankruptcy court.

You must file a whole petition after meeting all the norms in the bankruptcy court, where you reside or where your assets and business lie. After the petition is filed, all lawful proceedings are “stayed” and the creditors are impotent to continue or begin wages garnishments, lawsuits, or call you demanding the payments. Applying for a fee waiver in the court will release you the $299 payment that should be submitted by money order or cash. The filing fee must be fully paid when your beginning petition is filed. Some Bankruptcy Courts permit you to pay this fee in installments.

7. Additional documents.

Purvey the bankruptcy trustee with a copy of pay check stubs and the most recent tax returns. These must be given at least seven days earlier the creditors meet.

8. The creditors meet.

The creditors meet is held about 20 to 40 days after you sign the petition. You must look after this meeting and response all questions about your characteristic and financial status. This seldom happens, especially if most of your loans are non-secured. For instance a credit card company will not send its representatives for a meeting.

9. Personal Financial Management Instruction Course.

Finish the personal financial management instructions course after your case is filed and within 45 days of the creditors meet. This costs about $30. Your case can be dismissed if you go wrong to do this. The certificate of completion must be submitted as instructed to you.

10. Final correspondence.

Wait for a last letter stating the discharge of your debts. This letter will come 61 days after the creditors meet.

11. Get back on track.

At the end of Chapter 7 bankruptcy procedures, you are discharged. You are not responsible for the discharged debts and your creditors cannot take any legal or civil actions against you. You may commence re-building your credit, afresh.

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