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Bankruptcy: The Bankruptcy Blog
Chapter 7 Bankruptcy: The Process
After you've met with your bankruptcy lawyer and decided to file for Chapter 7 bankruptcy, here's what you can expect from before you file until you after you receive your discharge.
The credit counseling briefing: Before filing your petition with the bankruptcy court, you must complete this briefing, which acts as a filter: anyone who could benefit from credit counseling, debt negotiation or another bankruptcy alternative http://www.totalbankruptcy.com/filing-bankruptcy-alternatives.htm is discouraged from filing bankruptcy.
The automatic stay: Once your lawyer has filed your certificate from the briefing with your petition for bankruptcy, the automatic stay http://www.totalbankruptcy.com/automatic_stay.htm takes effect. It protects you from all collection action and lasts for the duration of your case.
The next six months: Your bankruptcy case will likely last about six months, during which time, you can expect the following:
- Meeting of the creditors: You'll testify in front of all the people to whom you owe money that the information in your petition is complete and accurate.
- Liquidation sale: If your bankruptcy trustee determines that you have any non-exempt assets, he or she can sell them to raise money to pay your creditors. In many Chapter 7 cases, filers do not have any non-exempt assets.
- Reaffirmation of debts: If you have any non-exempt assets you'd like to keep, you'll have a chance to reaffirm (renew) your debt with the lender – basically, you'll agree to keep making payments so you can keep whatever property you don't want to give up.
The financial management course: Before you're eligible for your Chapter 7 discharge, you must complete a financial management (also known as 'debtor education') course. The course is designed to help you make the most of your fresh financial start and includes tips on saving, managing money and handling credit.
The bankruptcy discharge: The court will determine which of your debts can be forgiven, and will relieve you of your responsibility to pay those debts. After you receive your discharge, you're technically out of bankruptcy.
The Next Eight Years
You cannot file for Chapter 7 bankruptcy again for the next eight years.
Bankruptcy's fresh start is intended to be a long-term solution, not an occasional boost. Take the lessons of the financial management course to heart – and good luck!
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