13 Bankruptcy Information
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Chapter 7 Bankruptcy
Also known as liquidation bankruptcy, it is the most common type filed under the
Bankruptcy Code. A
Chapter 7 allows a debtor to cancel most of their debts. A bankruptcy “trustee” will gather the debtor’s “nonexempt” property converting it to cash and then distributing it to your creditors. Debtors are allowed to keep certain property called “exempt” property. Your assets up to certain values will be considered exempt and these things you will get to keep. A debtor who has retained an experienced and knowledgeable attorney will find that they can probably keep all their assets.
In a Chapter 7, the attorney will meet with the debtor and obtain from them the various information necessary to proceed with the case. The attorney will begin constructing the bankruptcy petition. Once the petition is completed and the debtor has attended the credit counseling class, the attorney will file with the court.
Credit Counseling and
Debtor Education Classes
Sometime before filing the petition, the debtor will be required to attend a “credit counseling class”. The class is a short non-complicated class that is offered in person as well as over the internet. The fee is usually about $50. The debtor will receive a certificate of completion. Another class must be attended after filing the petition which is a “financial management course”. Likewise it is relatively brief, non-complicated, and costs around $50.
As soon as the attorney files the petition, he receives an appointment for what is known as the “341 creditors' meeting”. This almost always occurs several weeks after the petition is filed. Most creditors' meetings are simple and quick. The meeting is run by an individual known as a “trustee”, who is like a bankruptcy manager. You will appear on the designated date with your attorney. Other debtors filing for bankruptcy will be there too. When your name is called you will be sworn in and the trustee will ask you some questions. Typically the questions are routine and not complicated. Your creditors also have a right to appear at this meeting and ask you questions, but rarely do any show up.
If none of your creditors or the trustee
has any objections to any of your debts
or the nature of your case, then you are
simply going to be waiting for your
discharge. This usually occurs several
months after your creditors' meeting has
been completed. The discharge is the
final stage of your bankruptcy, and no
court hearing is necessary. You will
receive the discharge in the mail.
Chapter 13 Bankruptcy
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