Step 1: Determine if Chapter 7 Is the Right Bankruptcy For You
Deciding whether you will opt for Chapter 7 or Chapter 13 bankruptcy is an essential step in your bankruptcy journey. Working with an experienced bankruptcy lawyer like Attorney Ken Schneider is one of the best ways to make sure that you complete each step properly, and that you will be able to move forward from this process with the outcome that you expect. Chapter 7 bankruptcy will clear you of a significant amount of your debts, but there are drawbacks to choosing Chapter 7 instead of Chapter 13 that you will need to consider.
Step 2: Calculate your Income, Debts, and Assets
Once you have decided to file for Chapter 7 bankruptcy, you will need to calculate all relevant factors that will go into the actual bankruptcy. For instance, bankruptcy will not eliminate all debts, so you may still be obligated to continue paying things like child support and alimony, or student loans. In addition to these debts, your income will need to qualify for Chapter 7, and you will need to identify any and all assets that are exempt from bankruptcy.
Step 3: Preparing to File for Chapter 7 Bankruptcy
Once you have determined to file for Chapter 7, you will need to plan how the bankruptcy will be executed. If you have property that is used as collateral for certain debts, then you will need to decide how this property will be handled through the bankruptcy proceedings, either by “redeeming” the property and paying the replacement value outright, “reaffirm” the property and continue paying your debts, or “surrender” the property to your debtor. In addition to completing the actual paperwork, you will need to attend a credit counseling course.
Once you complete your credit counseling course and have determined how you will handle all of your properties that are tied into your debts, you will need to complete the extensive paperwork that comes with bankruptcy. You will receive a certificate of completion at the end of your credit course, and will also need to include this certificate as proof of your successful completion.
Step 4: Submit Your Bankruptcy Paperwork
Once you have taken the proper course, completed your paperwork, calculated and accounted for all of your debts, assets, and income, and are ready to proceed, you will now be able to officially file for Chapter 7 bankruptcy with the courts. At the time of filing, you will need to pay a filing fee unless you are approved to have this fee waived, and the courts will officially recognize that you have initiated a Chapter 7 bankruptcy.
In addition to the filing paperwork, you will need to submit a variety of documentation that will prove the accuracy of each claim that you have made in your bankruptcy filing. This will include things like income statements, bank account information, tax returns, and anything else that will help the bankruptcy trustee verify all of the information that you have provided.
Step 5: Completing Your Bankruptcy Obligations
Once your bankruptcy is initiated in the courts, there are many additional steps that you will need to take in order to satisfy all debtors and ensure that you have fulfilled all of your obligations. This will include resolving all of your existing debts in accordance with the terms of your bankruptcy, completing a debtor education course, and finally having your bankruptcy discharged. Upon discharge, you have resolved all debts covered by Chapter 7 and can move forward free of these debts.