BANKRUPTCY 101
WHAT IS CHAPTER 7 BANKRUPTCY?
In Chapter 7 bankruptcy, a debtor's debts are discharged or cancelled. There are some exceptions as to which debts may be cancelled.
HOW LONG DOES THE CHAPTER 7 BANKRUPTCY PROCESS TAKE and WHAT IS THE COST OF FILING?
he entire Chapter 7 bankruptcy process takes about four to six months, costs $335 in filing and administrative fees. Prior to filing, the debtor must complete credit counseling with an agency approved by the United States Trustee. (For a list of approved agencies in each state, go to the Trustee's website, www.usdoj.gov/ust, and click "Credit Counseling and Debtor Education.").
WHO CAN FILE ?
You won't be able to use Chapter 7 bankruptcy if you already received a bankruptcy discharge in the last six to eight years.
BENEFITS OF FILING BANKRUPTCY
As soon as a bankruptcy petition is filed and accepted by the Bankruptcy Court, an "automatic stay" is triggered. The filing of the petition prevents or "stays" creditors from trying to collect a debt from you. All contact and collection from creditors must cease once the automatic stay is in effect.
BANKRUPTCY COURT'S CONTROL OVER YOUR FINANCIAL MATTERS
By filing for Chapter 7 bankruptcy, you are technically placing the property you own and the debts you owe in the hands of the bankruptcy court. You can't sell or give away any of the property you own when you file, or pay off your pre-filing debts, without the court's consent. However, with a few exceptions, you can do what you wish with property you acquire and income you earn after you file for bankruptcy.
THE ROLE OF THE BANKRUPTCY TRUSTEE FOR CHAPTER 7 BANKRUPTCY
Upon the filing of a bankruptcy a "trustee" is appointed by the bankruptcy court whose role is to determine whether a creditor can and should be paid from your assets. The trustee will review the petition and other documents to determine if there are any assets from which a creditor can be paid. In most Chapter 7 bankruptcy cases, the trustee finds nothing of value to sell.
THE CHAPTER 7 BANKRUPTCY DISCHARGE
At the end of the bankruptcy process, all of your debts are wiped out (discharged) by the court, except debts that automatically survive bankruptcy, such as child support, most tax debts, and student loans, unless the court rules otherwise.