What are the steps to file bankruptcy?
Whether you choose to file Chapter 7 or Chapter 13 Bankruptcy there are very specific steps you must follow to legally complete the bankruptcy process. Chapter 7 Bankruptcy allows you to immediately discharge most unsecured, qualifying debts within 4 to 6 months. Chapter 13 bankruptcy will require you to create a 3 or 5 year bankruptcy repayment plan. Chapter 13, therefore, will require several additional steps to discharge your debts.
Below we will discuss the basic steps to complete a personal bankruptcy.
Complete your bankruptcy petition
Chapter 7 and Chapter 13 Bankruptcy will require you to complete a bankruptcy petition and file the petition with the appropriate bankruptcy court. Petitions can be filed jointly with a spouse or separately. After the petition is filed the court will issue a temporary injunction or automatic stay to stop creditor actions. An automatic stay can also stop a home foreclosure, property repossession, bank account levies and wage garnishment. Some collection actions may be commenced if the creditor asks the court for a motion to lift the automatic stay and it is granted by the court.
Pay the filing fee
The court will require the bankruptcy filing fees to be paid for both Chapter 7 and Chapter 13 Bankruptcy. Under some conditions the application fees may be paid in installments or waived by the court.
File all bankruptcy schedules
Bankruptcy schedules must be completed for both Chapter 7 and Chapter 13 Bankruptcy. Schedules will provide detailed information about your assets and liabilities, executory contracts, unexpired leases, statement of financial affairs, and current income and expenditures. Schedules must be submitted within 15 days from the date the bankruptcy petition is filed.
Complete the Chapter 13 bankruptcy repayment plan
A Chapter 13 bankruptcy filer is required to submit a bankruptcy repayment plan within 15 days from the date the bankruptcy petition is filed. The Chapter 13 Bankruptcy repayment plan will outline the creditors and how each creditor will be paid. Payments for the Chapter 13 plan must be made within 30 days from the date the bankruptcy is filed. Chapter 7 bankruptcy filers can skip this step.
All creditors are notified bankruptcy has commenced
Approximately 18 days after the bankruptcy petition is submitted to the court, the court will mail a Notice of Commencement of the case to the creditors. Information sent to the creditors will include deadlines for objecting to the debt discharge and the date for all of the bankruptcy meetings, such as the 341 Meeting of the Creditors. Creditors may also have a chance to file their Proof of Claims.
Attend the 341 Meeting of the creditors
The 341 Meeting of the Creditors is held approximately 6 weeks after a bankruptcy petition is filed. The debtor must attend the meeting, although the creditors may or may not attend. The court-appointed trustee will review the specifics of the case and creditors will have 30 days after this meeting to object to the debtor's exemption for their debts.
Chapter 7 Bankruptcy discharge
Most Chapter 7 filers can expect to have their debt discharged within 60 to 90 days after the 341 Meeting of the Creditors.
Chapter 13 Bankruptcy Discharge
Chapter 13 Bankruptcy discharges are made after the debtor completes their 3 or 5 year debt repayment plan.
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