Chapter 7 bankruptcies are by far the most common type of bankruptcy filed. Hundreds of thousands of people file for Chapter 7 bankruptcy each year. But, if you are thinking about filing for bankruptcy, you need to understand your rights and responsibilities.
At Riverwest Law Firm, we represent individuals who have decided to file for Chapter 7 bankruptcy in Shorewood, Wisconsin, or the surrounding areas. Our bankruptcy lawyers will help you understand the legal process and work hard to get you the outcome you deserve. If you are considering bankruptcy, contact our office at (414) 369-2390 to schedule a free consultation.
How Chapter 7 Bankruptcy Can Be Used
According to the most recent data available from the United States Courts, over 70% of all bankruptcy filings in the country are Chapter 7 cases. These cases, also known as liquidation bankruptcies, are best for use with unsecured, non-priority debts. Examples of debts that can be discharged through this type of bankruptcy are medical debts, judgments, and credit card bills.
Key features of Chapter 7 bankruptcy:
- Can be filed by individuals or businesses
- Short duration, usually over in 3-5 months
- Generally inexpensive
- No monthly payments
- Clear Pre-Filing/Post-Filing distinction
In addition, clients may be able to use Chapter 7 bankruptcies to remove garnishments, make income available for new purchases, and to avoid utility cutoffs. However, this type of bankruptcy doesn’t easily remove back payments on car loans, mortgages, or other secured debts. Priority debts, such as employee wages, court fines, and support obligations, are paid back first in this type of bankruptcy.
Steps to Take Before Filing a Chapter 7 Bankruptcy
When filing a Chapter 7 bankruptcy, there are several steps that the debtor must take. Before you file, the primary focus is on preparing the bankruptcy petition and schedules. In these schedules, assets, income, expenses, and debts are all disclosed and analyzed for easy processing.
Other events that are relevant to the bankruptcy, such as whether or not there are pending lawsuits or past preferential payments, are disclosed to the courts in the Statement of Financial Affairs. This process includes reviewing exactly where the debtor’s money is being spent, generating financial reports for the debtors, and carefully reviewing the various types of real and personal property owned.
What Belongings Will Be Protected?
In consumer cases, protection of the debtor’s belongings begins while preparing the Statement of Financial Affairs. During this stage, the various types of assets are examined, and determined which type of protection can be applied.
Before filing, individual debtors must also take a credit counseling course. This requirement can be satisfied at a wide variety of approved courses, many of which are available at low cost online. Once the petition and schedules are prepared, and any required counseling is completed, the case can be filed.
What Is the Reactionary Phase?
After filing begins, you enter the reactionary phase of the bankruptcy. There is one guaranteed meeting with the trustee called a Meeting of Creditors. Before this meeting, the trustee will ask for a list of documents that must be provided. Examples of documents that may need to be provided include paycheck statements and vehicle titles.
At the meeting, the trustee asks a series of questions to you and your attorney regarding the accuracy of the various documents submitted to the court and the trustee. During the post-filing period, discussions with various creditors about reaffirmation, redemption, and other bankruptcy-related discussions occur, which can require various financial assessments and document preparation.
When Will Discharge be Granted?
Before discharge can be granted, the debtor must also take a financial management course, which is provided by the same groups that the credit counseling course provides. After approximately 3-4 months, and once all the required paperwork is submitted, a discharge will be issued for the debtor, which frees the debtor from many of their debts.
Do I Need a Bankruptcy Attorney to File Chapter 7?
It is always in your best interest to consult with an experienced bankruptcy attorney before filing. A bankruptcy attorney can help you understand your rights and the legal process. Filing for bankruptcy is never an easy decision, but retaining an attorney can help ensure it goes smoothly.
Filing for bankruptcy is designed to help individuals in true financial distress to overcome insurmountable debt. It is a legal option to help you get back on your feet without having to worry about repaying certain creditors.
Considering Filing for Chapter 7 Bankruptcy? Contact Our Office.
If you are considering filing for bankruptcy in Shorewood, Wisconsin, contact our office at (414) 369-2390 to schedule a free, no-obligation consultation. All Chapter 7 bankruptcy evaluations are confidential. Get the experienced representation you need today to get you the results you deserve tomorrow. Do not wait. Call now to speak directly with a member of our legal team.
