Filing Chapter 7: How Does It Work?
Wondering how Chapter 7 works is normal, as not everybody should be thoroughly familiar with the inner workings of filing for bankruptcy. It’s generally advisable that you schedule a consultation with a bankruptcy attorney in San Diego County if you live in this area because they are familiar with specific local regulations. However, gathering some general information on bankruptcy and Chapter 7 can help you prepare for your appointment.
Some people want to know about whether or not they qualify for Chapter 7, while others inquire about a different chapter – they want to know if they qualify for Chapter 13, as well as the most important aspects of Chapter 13. But, let’s first see how Chapter 7 functions.
What happens when you file Chapter 7?
Filing for bankruptcy, either by filing a Chapter 7 or Chapter 13, means that you’ll have to go through a series of predetermined steps with members of the California Department of Justice. However, we have to emphasize that filing for bankruptcy shouldn’t frighten you since it is the best course of action in many cases involving financial predicaments. Now, let’s see what the first step in filing for bankruptcy entails:
- Forms – First of all, you have to get all your forms filled out properly and in order. This is the most difficult part of filing for bankruptcy, as it can be quite complicated without professional legal counsel.
- Case number – Secondly, once you’ve filled a Chapter 7, you’ll receive a number for your case. You should not lose your bankruptcy case number since it’s necessary for all further proceedings.
- Trustee – Thirdly, you’ll be appointed a trustee – a court official who will oversee the proceedings of your case. You will get an email from your trustee with a request to send any documents pertaining to your case. It’s paramount to mail the requested documents, as failing to do so will eliminate any possibility for you to receive a debt discharge.
- Protection – Finally, after filing for bankruptcy, you’ll get protection from all of your creditors. They will not be able to sue you, call you, or take any additional action against you. If they do call you, just give them your case number, and they’ll probably never contact you again.
How does a Chapter 7 work?
Chapter 7 can sound, and rightly so, complicated to an individual who’s never had any contact with this portion of financial law. That is why you should always seek professional assistance when handling any type of bankruptcy. But, it’s also recommended that you have some knowledge of all the steps involved prior to consulting a legal professional:
- Preparation – First, you have to prepare for filing a Chapter 7 in order to begin the process of declaring bankruptcy. This means collecting all the necessary documents, filling them out, making a list of all your assets, both secured and unsecured, as well as all your debts.
- Counseling – Before filing for bankruptcy under Chapter 7, you have to undergo a credit counseling session within three months preceding the moment of filing. This will help you evaluate the current state of your financial affairs and ensure your bankruptcy case doesn’t get dismissed.
- Attorney – It’s perfectly possible to go through the bankruptcy process alone, or “pro se”, as is the official term, but we strongly advise you not to do so. Consult with a legal professional and decide the rest of your actions together.
- Filing – If you’ve decided to hire an attorney, it will be up to your legal representative to first inspect, and then file all the previously prepared paperwork. With this, the process will begin.
- Revision – As previously said, a trustee will be appointed to review your case in great detail, as well as to provide a link between your creditors and you, so as to ensure smooth proceedings and mutual satisfaction.
- Property – When you’ve met with your appointed trustee, you’ll need to make a decision on surrendering non-exempt property. You should consult with your bankruptcy attorney on these matters since they will protect your rights and assets.
- Creditors – Upon case review, your trustee will organize a meeting of your creditors. Also called a “341 hearing”, this is probably the only time you’ll have to actually step foot in the courthouse. It will take place somewhere between the 21st and 40th day after the filing.
- Secured debts – After the meeting, it’s time to decide how to handle any secured debts you might have, such as car loans or mortgages. Your attorney will advise you on whether to continue making payments or take a different course of action depending on your financial situation.
- Discharge – One you’ve finished handling your secured loans and your non-exempt property, it’s time for all your unsecured loans which remain to be written off or discharged. In general, they’re forgiven in their entirety and creditors will not be able to collect them anymore as you legally aren’t in debt.
- Start – Finally, it’s time to begin anew with a clean slate. You will be able to start rebuilding your credit, get a new card, and begin making small monthly charges. You’ll be as good as new soon!
How long does Chapter 7 take?
For a great majority of cases, Chapter 7 takes anywhere between three to four months. That’s the usual time frame for obtaining discharge.
Sometimes, however, your case may be too complex to handle within this time period and require more time to complete it. But, with a good attorney, even complex cases can be completed in a time-efficient manner.
“Who is the leading bankruptcy attorney in San Diego County?”
Filing a Chapter 7 can prove complicated and stressful for an uninitiated individual, so it’s wise to seek professional assistance for the process. If you’re looking for someone to explain the minutiae of filing a Chapter 7, there are no attorneys in San Diego with more knowledge on the matter than Chang & Diamond.
We’re experienced, we’re dedicated, and we’ll help you file for bankruptcy and walk away carefree and unschated. With our help, you’ll once again be able to enjoy the beauty at the San Diego Museum of Art without a single worry in your mind. Contact us today!