For those of you who might never had to consider bankruptcy, here is some basic information about how a simple Chapter 7 consumer case works.

Chapter 7 consumer bankruptcy is designed for individuals, married couples and small business owners who are drowning in debt and need to make a fresh start. These consumers are unable to pay debts from their current income and life situation.

The case is begun by filing the official petition, schedules and other necessary documents with the United States Bankruptcy Court. These forms list all of your assets and all of your debts, along with some recent financial history. 

It is important that every creditor is listed in the schedules with an accurate mailing address. You must list all of your debts, even if you intend to reaffirm/keep the debt.

The schedules also list your property, any debts secured by that property, and the sale value of the property.  “Property” means “assets” or “possessions”, not just real estate. In most consumer bankruptcy cases your property is protected by exemptions that allow you to keep a certain amount of your assets. Most debtors are able to keep their homes and their vehicles.

After your case is filed you make an appearance at your district’s Bankruptcy Court, at which time you have a meeting with your Chapter 7 Trustee (who is not a judge, but an attorney appointed to oversee your case).  He or she simply verifies that all the information in your bankruptcy petition is correct, asks you some questions about your assets and verifies your identity.  Once this process is over you then wait 60-90 days to receive your discharge in the mail. 

If you have questions about this or any other bankruptcy matter, please feel free to schedule a free consultation with Claire.  She will be happy to discuss your personal situation and help you determine the best path for you whether or not that involves filing bankruptcy.