Saturday, August 20, 2011
Filing a Chapter 7 - What To Expect
A Chapter 7 bankruptcy is know as a liquidation bankruptcy, or a start over again bankruptcy. It is designed to provide individuals with a fresh start. The filing of a Chapter 7 involves the filing of a petition, together with other required documents, with the Clerk of the Bankruptcy Court. Thereafter, the case is assigned to a bankruptcy judge and a trustee, and a date is set for the Meeting of Creditors. A notice is sent out to all interested parties in the case letting them know your case has commenced. The notice provides some general information about your case, such as the date of the commencement of your bankruptcy case, the case number, name and address of the Clerk of Court, the name of the judge, the name and address of the trustee assigned to your case, and the date of your 341 meeting, otherwise known as the Meeting of Creditors.
After the case is filed, you will usually receive correspondence from the trustee assigned to your case asking for certain documents, and usually giving directions for contacting the trustee prior to the meeting of creditors. This scheduled conversation with the trustee in designed to make the scheduled meeting of creditors more efficient. Typically, cases filed in Jacksonville, Florida, where I practice, will have the 341 meeting scheduled between 30 and 40 days after the case is filed. The name of this meeting is misleading, as creditors rarely show up, although they certainly can. It is usually a meeting with the trustee, where at the meeting you are placed under oath and asked questions related to the documents you filed with the court, and documents provided to the Trustee.
The role of the trustee is to oversee the case, and determine if there are any non-exempt assets that may be available for distribution to creditors. Although most cases do not have any assets, it is not uncommon for a bankruptcy estate to have assets which are liquidated. The good news is, usually these assets are simply sold back to the debtor who filed the bankruptcy.
Between 3 and 4 months after the 341 meeting, baring anything unusual happening, you will receive a discharge order from the Court. This discharge is the magic paper you are looking for; it prevents discharged creditors from being able to collect any money from you.
While the actual filing of a bankruptcy is a little more complicated than this, this provides a general overview of the Chapter 7 bankruptcy process. For a more detailed explanation of how this process works, and what to expect, you should get a consultation from a bankruptcy attorney in your area. Most attorneys that assist people with the filing of bankruptcy provide free consultations.