Chapter 7 bankruptcy is basically the conversion of your assets into cash by creditors in the event that you are unable to pay your debts. Chapter 7 bankruptcy is the most basic form of bankruptcy filed in the United States. Even more simply put, with some exceptions, you can just walk away from your debt by selling what you own. The proceeds go towards paying the creditors. People file for bankruptcy for a variety of reasons. If you need an attorney to guide you through the process of Chapter 7 bankruptcy, contact Juan C. Velasco, Esq.
Before you can file for Chapter 7 bankruptcy, you will have to take the necessary steps to become eligible. You must receive credit counseling from a U.S. Trustee-approved agency within 6 months before filing. In addition, you will have to take a debtor education course in order for the state to grant you a discharge. Once these requirements are satisfied, you can begin the process.
After you obtain an attorney, you will file a petition for bankruptcy and other forms that require you to provide the following information in order to begin the filing process:
A list of all of your debts
An account of your income
A list of all of your assets, including all of your real estate and possessions
Your monthly living expenses
Once you have successfully filed for Chapter 7, an automatic stay goes into effect. This stops creditors from taking steps to collect your debt. You will put your assets in the hands of a court-appointed agent that will decide on all matters. This person is called a bankruptcy trustee. They will assign value to your property and use your assets to pay as much of the debt as possible.
After filing for Chapter 7, you will have to attend a Meeting of Creditors, also called a 341(a) hearing. At this meeting, you, the trustee, your lawyer, and any creditors who wish to attend will meet to discuss your financial situation and establish a clear picture for the trustee and allow creditors to collect information that would support a rejection of the matter. This will usually be your only visit to the courthouse.
To be eligible for Chapter 7, you will have to compare your income to the median income for a comparable household in your state. If your income is less than the median, you will most likely be eligible. If your income is over the median, Chapter 7 may still be a possibility under the right circumstances.
Once you have successfully gone through the process of Chapter 7, a court should grant you a bankruptcy discharge, freeing you of your debt. There are some exceptions. You cannot discharge student loans, child support, and most tax debts. Though the process seems easy, you are vulnerable to objections by creditors. If a creditor successfully objects to your Chapter 7, you may be liable for paying them back.
To learn more about the bankruptcy process, simply read Attorney Velasco’s Complete Guide to NJ Bankruptcy.
The Velasco Law Office has been of service to New Jersey for over 25 years. Chapter 7 bankruptcy is a complicated and document-heavy process. In order to best protect your rights, it is important to have an attorney that can help you through your legal matter. Velasco Law Office is ready to assess your situation and effectively guide you through your legal matter.