- You must attend a federally-approved credit counseling session in the 180 days prior to filing Chapter 7, according to the Federal Trade Commission. Then you will file basic bankruptcy paperwork, which includes a list of your assets, debts and income; you will also arrange to pay your court costs, which are $299 as of 2010.
- Once you file Chapter 7, your creditors cannot legally contact you. They cannot call your home, write letters, garnish your wages, sue you, evict you, foreclose upon your home or repossess your car. This "automatic stay" allows your local bankruptcy court to process your case and decide how your creditors will or will not be able to recoup their losses. Keep in mind that once your bankruptcy is finalized, usually within four to six months of your initial filing, usually secured creditors can take your car or foreclose upon your home; the exact action depends upon the judge's decisions.
- You'll receive mailed notice of the required 341 meeting of creditors; this is usually held within about 40 days of your initial Chapter 7 filing, according to the United States Bankruptcy Court District of Arizona. You must attend this meeting even if you hired an attorney; failure to do so will likely result in dismissal of your Chapter 7 petition, according to the book "How to File for Chapter 7 Bankruptcy." Generally, creditors do not object to a person's bankruptcy unless they feel some type of fraud was committed such as lying on a credit application or charging up credit cards and then immediately declaring Chapter 7.
- As long as no one objects to your bankruptcy, you'll proceed to the discharge hearing phase, according to the book "How to File for Chapter 7 Bankruptcy." You must attend this meeting if you did not hire an attorney; you may also want to attend even if you hired legal representation. During the discharge hearing, a bankruptcy judge will likely permanently forgive your eligible debts. In rare cases, the judge may decline your bankruptcy; this could be due to a paperwork error or outright fraud. In the event of paperwork problems, you can usually amend the issue and re-file your Chapter 7 case.
- Once you Chapter 7 case is discharged by the court, you'll receive in the mail a packet of court documents known as "discharge papers." Keep these papers in case creditors illegally attempt to collect upon liquidated debts in the future. You can legally pursue new credit immediately but may need to pay higher interest rates or make a down payment or security deposit to back your application, according to the book "How to File for Chapter 7 Bankruptcy."
previous post