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Initially, it is important to make certain that you qualify for a Chapter 7 Bankruptcy.  There are several steps one must take in anticipation of filing a bankruptcy, it would be a waste of both time and money to find out down the road that you don’t qualify for the Chapter 7 Bankruptcy relief desired.    To determine eligibility of filing a Chapter 7 Bankruptcy, our law office performs an appraisal on any real estate owned and calculates family income and expenses.  A home appraisal is necessary to determine whether any non-exempt equity exists.  Further, family income and expenses are most relevant for means testing under the Bankruptcy Code.

Once it is determined that one qualifies for Bankruptcy, we must analyze your debt.  A Chapter 7 Bankruptcy discharge is generally a discharge of all unsecured non-priority debt, such as credit cards, personal loans, medical bills, pay day loans, past due utility bills, etc.  The debts that are not included in a Chapter 7 are priority or non-dischargeable debts such as most IRS debts, child support, alimony, government fines and student loans.  As far as secured debts, homes and cars, the filing party usually has the choice to reaffirm (keep), redeem(keep and lower payments based on fair market value) or surrender (give back) the secured property.

So now that it is determined that you are eligible and what debts need to be included, there are several items our office will need from you in order to file an accurate bankruptcy petition on your behalf.  Such items include pay stubs, tax returns, driver’s license, social security cards, financial statements and other easily accessible documents.  After all items are provided credit counseling will be ordered on your behalf.  Clients frequently ask me, do I have to go to a counseling class and for how long?  The class is set up for you to complete online or over the phone in the comfort and privacy of your own home and generally takes 20-40 minutes, upon your completion a certificate is automatically emailed to our Philadelphia bankruptcy law office.  Upon completion of the course and putting all documents into a Chapter 7 Bankruptcy Petition, the filing is made on your behalf.

Once the Chapter 7 Bankruptcy filing is made, all creditors must stop all collection action against you, meaning all letters, phone calls and lawsuits muct cease by virtue of the automatic stay employed in a bankruptcy filing.  In a Chapter 7 Bankruptcy, there is usually only one meeting one must attend.  It is known as the 341 Meeting, held in an administrative setting and usually lasts less than 20 minutes.  After the 341 Meeting, one must complete the second course, financial management and the only thing then to do is wait for a discharge.  The Discharge in Chapter 7 Bankruptcy generally takes 90-120 after the meeting days to be mailed to the Petitioner.  After you receive the discharge you are officially debt free!

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Philadelphia, Pennsylvania region, you may contact the Philadelphia Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008  or (877) 4-LAW-411 or email [email protected]. Thank you.