If you’re facing an overwhelming amount of debt and you don’t have enough income to cover even the minimum monthly payments, chapter 7 may be the answer. A popular form of consumer bankruptcy, chapter 7 can provide a clean slate for those in dire need of a fresh start.
Should you decide to pursue chapter 7, here’s what you can expect at every stage:
1. File the Petition
To commence the bankruptcy proceedings, you must complete a packet of documents, which comprises the official petition. In these documents, you will have to disclose your financial situation, including any streams of income, all your debts, and any assets you own. You must also include a certificate stating you have completed an approved credit counseling course within the past six months.
Once you file this petition, the court will enact an automatic stay, which prohibits creditors from taking legal action against you in pursuit of payment for at least as long as your case is pending.
2. Attend the Meeting of Creditors
Called the 341 hearing, the meeting of creditors gives lenders a chance to inquire about your case, though few probably will. Held by the bankruptcy trustee, this proceeding also gives the court a chance to ask any questions that arose when reviewing your petition.
After confirming your financial situation, the bankruptcy trustee will proceed with liquidation, whereby they will sell non-exempt assets (if you happen to have any) to pay off at least a portion of your debts.
3. Complete a Debtor’s Education Course
In addition to the credit counseling course you take before declaring bankruptcy, you’re going to have to complete a debtor’s education course after. This is the final step before the court issues the discharge.
4. Discharge Applicable Debts
The final stage of the chapter 7 proceedings is erasing applicable debts. Examples include credit card balances and medical bills. Debts that won’t be discharged, on the other hand, generally include child support payments, fairly recent tax obligations, and student loans.
How Long Does It Take to Complete a Chapter 7 Bankruptcy?
Assuming there are no major issues that cause significant delays, a chapter 7 bankruptcy usually takes anywhere from four to six months to complete. Cases involving few, if any, assets are generally closed sooner—and can sometimes be completed in a matter of weeks—because the liquidation proceedings are so much simpler.
Other factors that can influence the duration of the proceedings include whether any creditors object to the proposed discharge and the number of filers who are involved. Joint petitions filed by married couples typically take longer because there are twice as many documents for the court to review.
Call 601-487-8448 to Speak with a Bankruptcy Lawyer in Jackson
To see if you’re a good candidate for chapter 7, turn to Brown Bass & Jeter, PLLC. Our compassionate team is proud to help clients wipe their slates clean so they can regain their financial footing. To schedule a consultation with a bankruptcy attorney in Jackson, fill out our Online Contact Form or call 601-487-4884.