After deciding that bankruptcy will be your most effective solution for achieving debt relief, you will need to determine which chapter to file. This will largely depend on how much you earn and the type of debt you have. As long as you meet the income requirements and the majority of your debts are unsecured, a Chapter 7 bankruptcy is likely to provide you with the best chance for getting a fresh financial start. However, before you begin the filing process, it’s important to know exactly how a Chapter 7 works. Here is some insight into what will happen once the petition has been submitted.
What to Expect After Filing a Chapter 7 Bankruptcy
The Automatic Stay
As soon as you file the bankruptcy paperwork, an automatic stay will go into effect. This will temporarily prevent creditors from continuing their efforts to collect what you owe. In turn, even if they have a lawsuit pending against you or judgment from the court, they will not be able to take any action, such as garnishing your wages or foreclosing on your house.
Chapter 7 Trustee
Next, you will be assigned a bankruptcy trustee. This is because your assets become part of a bankruptcy estate when you file for Chapter 7, and the trustee is in charge of overseeing the estate. It’s their duty to examine all of the documents you file to make sure you’ve correctly listed all of your property, so they can figure out if there are any nonexempt assets that can be sold to provide funds to the creditors.
Meeting of Creditors
Another responsibility the trustee has is to hold a meeting of creditors. During this meeting, you will be sworn in and asked a series of questions about your assets, finances, and bankruptcy paperwork. Your creditors are also given the opportunity to attend and ask any questions they might have. In most Chapter 7 bankruptcies, this is the only time a debtor will need to go to court.
After the meeting of creditors, your trustee will decide whether or not you have nonexempt property that should be sold for the benefit of the creditors. If so, you will be required to surrender these assets. In the event you don’t have any property that falls in the nonexempt category, the trustee will report this to the court. Each state has a long list of exemptions that allow most Chapter 7 bankruptcy petitioners to keep their assets.
If you are interested in learning more about the Chapter 7 bankruptcy process, contact The Gil Law Firm. Since 2000, their seasoned bankruptcy attorneys have remained committed to providing residents in the Greater Dothan, AL, area with quality counsel and representation. After carefully assessing your debts and finances, they will help identify which bankruptcy type is most suitable to file and walk you through the steps from start to finish. Call (334) 673-0100 to schedule a consultation, or visit them online for more information about the different options available.