Personal Bankruptcy Information
April 23rd, 2009There are two options for filing bankruptcy as a consumer, chapter 7 and chapter 13 bankruptcy. Chapter 7 is often referred to as liquidation as all of your unexempted property is sold in order to pay off your creditors. Exempt belongings is that property that the government allows you to keep in order to live your life normally, like a car, clothing, furniture to sit on, etc. Every state sets their bankruptcy exemptions, as well as Federal exemptions that can be used in some states.In order to qualify to file a ch 7 petition, cannot be a business or farm, must be an individual, you must complete a credit counseling course from an sanctioned agency within the 180 days before filing for bankruptcy relief, and qualify the means test which is filed with your petition.In a chapter 7 petition, you will have to file schedules that list your creditors, assets, earnings and bills. You will also have to provide copies of tax returns filed the last two years, pay stubs from the last 6 months, and your certificate from completing the credit counseling course. Married bankruptcy filers must provide the spouses information even if they are not going to file bankruptcy together so the bankruptcy court can determine the households ability to pay the debts.When completing your petition, you will have the option to keep paying and keeping your property if you are able to, such as your domicile or automobile, by making a reaffirmation agreement with the creditor. By reaffirming the debt you are acknowledging that you intend to make payments. If the trustee sanctions your reaffirmation agreement, the creditor may be able to repossess the property if you do not pay.When you file your chapter 7 bankruptcy petition you will have to pay up a filing fee of $299. This fee can be paid in installments, up to 4 no later than 120 days after filing. Once you file, the bankruptcy stay is in effect, creditors cannot call, collect or file lawsuits. Each of your creditors will be advised that you have filed bankruptcy and yielded a chance to reply. A 341 meeting will happen within 20-40 days. During this group meeting, the creditors and trustee can ask you questions.In the next 10 days the trustee rules on whether your case is abusive. If the trustee finds a presumption of abuse you can be forced to file ch 13 instead.The bankruptcy trustee is then responsible for liquidating your assets that are not exempt, meaning they are not protected by filing bankruptcy, and giving the proceeds from the sales to your unsecured creditors. After liquidation a discharge is granted to you, which wipes out the rest of your debts.
