What Are the Steps of a Chapter 7 Bankruptcy?

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What Are the Steps of a Chapter 7 Bankruptcy?

It is always hard to take a step when you don’t know what’s going to happen. That’s why we wanted to take the time to walk you through the steps of a Chapter 7 bankruptcy.

This can also help you get prepared for the bankruptcy process so that you reap the maximum amount of benefit from it.

Step 1

Gather your financial documents. You need to have at least 2 months of bank statements and payroll stubs. You also need the last two tax returns, a copy of all your bills, and information on any assets you own, such as your house or car. 

When in doubt, bring it along. In bankruptcy the danger is usually forgetting information, not bringing too much.

See also: Your Bankruptcy Checklist.

Step 2

This is the free consultation stage. This is where we’re going to sit down with you and go over your finances, needs, and goals.

We’re also going to look to see if there are any hidden problems or pitfalls which might impact the timing of your bankruptcy, or cause problems in bankruptcy court later. 

This is also when you’ll decide if you’re working with the right bankruptcy lawyer. Hopefully by the end of your consultation you’ll feel respected, heard, and comfortable enough to know that you’re working with the right person.

See also: How Hard is It to File For Chapter 7?

Step 3 

Next up is filing for bankruptcy. This is when the case officially reaches the courts. It also begins the automatic stay, ensuring that creditors can’t come after you any more. You’ve now put an end to collection calls, threats of repossession, foreclosure proceedings, and lawsuits. 

You’ll pause and take a brief financial counseling course that you can complete online. 

Your attorney will advise you on additional next steps, if any. But in general, this is a time where a lot of our clients breathe a big sigh of relief, and allow some of the mental and emotional strain of being in debt to drain away. 

See also: It’s Official: Financial Stress, Physical Health, and Mental Health Are Linked.

Step 4

You may feel a new surge of nervousness when you get information on your 341 hearing. But take a deep breath and don’t panic.

This meeting is called “the meeting of creditors,” but in reality creditors rarely show up to Chapter 7 hearings unless you’ve got a huge balance of some kind, or unless they think you’re perpetrating some sort of fraud on them. Since you’ve been open and honest with your bankruptcy attorney you’ve already got someone in your corner who can meet any and all objections.

More than likely, the trustee will just ask you a few basic, simple questions, and then it will be over.

See also: What Happens at a Bankruptcy 341 Hearing?

Step 5

About two months after your 341 hearing is done you’ll receive your bankruptcy discharge. You are now debt free, with the possible exception of non-dischargeable debts. Those huge medical bills are gone. So is the thousands of dollars in credit card debt you were never going to be able to pay.

It really is that easy.

See also: 5 Ways Your Life Will Change After Bankruptcy.

So if you’ve been hesitating to file because you are anticipating a long, drawn out, terrifying process, don’t be! Instead, take the first step. Contact us to schedule your free consultation today.

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