What is Chapter 7 Bankruptcy?

Let Our Redding Bankruptcy Lawyer Explain if This is for You

During the fiscal year ending September 2009, 70% of all bankruptcies were under Chapter 7. Of those 95% were “non-business filings”. (Administrative Office of the U.S. Courts)

As required by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, prior to filing either Chapter 7 bankruptcy or Chapter 13 bankruptcy and prior to 180 days of the filing date, the debtor must obtain credit counseling from an approved non-profit credit counseling agency. Then, a second class, called Debtor Education, must be done after the filing, no later than six weeks after the Meeting of Creditors or else the case closes without a discharge. Redding bankruptcy attorney PATRICIA JOHNSON will assist you in selecting an agency that is trustworthy. Consultations are always free.

Once you and your bankruptcy attorney have determined your most logical solution is bankruptcy, the process is very structured and organized.

The Bankruptcy Process

A married couple may choose to file jointly or individually, or only one spouse may choose to file. However, the person filing must provide financial information for both parties if married and residing together. When discussing this with a spouse, remember that many times this is the only way to put a stop to collections actions by creditors.  Once you eliminate the pressures and stresses of collection letters and telephone calls, it becomes easier to get a clearer picture of your financial situation and develop a plan of action to avoid the same mistakes and better manage your debt. And it may relieve a lot of the tension and stress in your marriage. A Redding bankruptcy lawyer can give details on how this is accomplished.

Patricia Johnson will provide the client with the proper forms and checklists of information and documentation required for filing bankruptcy. This will include:

•     A list of all creditors, the amount and nature of the claims, and when incurred       
•     The sources, amounts, and frequency of the debtor’s income           
•     A list of all of the debtor’s property*
•     A detailed list of the debtor’s monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc  

*The debtor is required to list all property, even though the law designates some property as “exempt” from liquidation. Your bankruptcy attorney will provide more information.

Continuing the Bankruptcy Process

After the filing of the petition, the court assigns a trustee (you do not see a judge unless there is a big problem) and schedules a date for a meeting between the debtor, trustee and creditors-very few show up at the hearing. This meeting will take place before the trustee and gives the creditors, if they show up, the opportunity to question the debtor about his/her ability to honor their debts. As your attorney, Patricia Johnson will be by your side during this process.

The trustee is mediator between the debtor, creditors and the courts. He or she administers the case and liquidates the debtor’s non-exempt assets. Once the proceeds are exhausted, the remaining eligible debts are “discharged”. In about 1% of Chapter 7 bankruptcy cases, a debt may not discharge. In the other 99%, the discharge releases the debtor from the liability of the debt and prohibits the creditor from taking any further collection actions. Some debts, such as child and spousal support, fraud judgments, recent taxes, money owed to some government agencies, most student loans, are not dischargeable.

How Can We Help You?

Patricia Johnson will give you her recommendations because she does have your best interests in mind and has the experience to determine the best course of action, for your specific circumstances. As your bankruptcy attorney, she prefers to conduct her business with a personal touch. This means all of your conversations will be either in person or via telephone – not through a cold and emotionless e-mail. Being a Redding bankruptcy attorney allows her to help regular people who find themselves in irregular financial situations. Contact our law firm now to set up your free consultation.