Chapter 7 bankruptcy allows many debts to be forgiven. The process includes taking certain steps at the proper times. There are many regulations that guide when and how a bankruptcy must be filed. It takes time to be relieved of many debts through chapter 7. Understanding the timeline will help guide an individual or business prepare for a chapter 7 bankruptcy filing.
Qualifications and Counseling
Ensuring you meet the requirements for bankruptcy is essential. Attempting to file for chapter 7 when you are able to repay some of your debts through chapter 13 can be a detrimental mistake. This will be considered taking advantage of the system and may affect any future claims for bankruptcy. Speak to a bankruptcy lawyer before you decide to file for chapter 7 to prevent this from occurring.
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A counseling session is required by the courts before a case can be officially filed. This must be completed within the 6 months of filing.
File the Case
The next step is to head to the court house and sign the necessary paperwork. Soon after, creditors will be notified by the courts and debt collectors will stop calling.
After 20-40 days, a meeting will take place between the person who has filed and their creditors. This is called a "341 meeting." Often times the creditors do not participate. After this step has been taken, creditors must report unsecured debts that they believe are not eligible for forgiveness.
At this point in the chapter 7 bankruptcy process, many of your debts may be forgiven.
According to the National Bankruptcy Research Center, chapter 7 bankruptcies are up 32% since 2008. Therefore, the government is being more and more cautious with regards to whom they grant this status. Understanding the process and timeline will be an asset to those who want to successfully enter into chapter 7.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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