Bankruptcy can be helpful if you are struggling with debt. This legal alternative offers different options for individuals and companies in various financial situations. The best known and most popular type of bankruptcy in the United States is undoubtedly Chapter 7.
Chapter 7 bankruptcy, also known as “straight bankruptcy” or “liquidation,” will erase all debts that can be legally eliminated, giving you the fresh start you need to begin rebuilding your finances from the ground up.
However, you should know that there are specific rules you must abide by before and during your Chapter 7 filing. These rules are a combination of federal bankruptcy laws and state laws.
Keep these rules in mind to maximize the chances of success of your Chapter 7 bankruptcy filing.
No rule says you need an attorney, but…
Legally, you don’t need an attorney to file for Chapter 7 bankruptcy. Technically, you could handle the entire process on your own, but doing so may not be the best idea.
The bankruptcy process is more complicated than it seems. By filing on your own, you risk making unnecessary mistakes that could jeopardize the debt discharge you are looking for.
By working with a Los Angeles chapter 7 bankruptcy attorney, you will not only make things significantly easier on yourself, but it could save you time and money in the long run.
Most California bankruptcy attorneys, such as KT Bankruptcy Lawyer, offer completely free consultations. If you want to find out how they might help you, don’t hesitate to give them a call.
Rules before filing for chapter 7 bankruptcy
Before filing for Chapter 7 bankruptcy, there are two rules you should keep in mind:
You need to take credit counseling.
To be eligible for any type of bankruptcy, you must take a credit counseling course within 180 days before filing. This one-hour course must be approved by the credit counseling agency and your bankruptcy trustee.
You must pass the means test.
Now, if you want to file for Chapter 7 bankruptcy, you must pass a means test. This test is an eligibility analysis that compares your disposable income to the state median for comparable households. If your income is below the median, you will qualify automatically. If not, you will have to deduct certain living expenses. If, after that, your disposable income is sufficiently low, you may be eligible. Otherwise, you won’t be eligible to file for Chapter 7 bankruptcy.
Rules during the chapter 7 bankruptcy process
After qualifying for Chapter 7 bankruptcy, these are the rules you should be aware of during the process:
You must use official bankruptcy forms.
Bankruptcy courts require that everyone in the United States must use the same bankruptcy forms during their filing. You will be able to download these forms for free from your local bankruptcy court’s website.
You have to send the required paperwork and pay the filing fee
A crucial step during your filing will be to submit all required forms and paperwork to the bankruptcy court. Have a bankruptcy lawyer near you review your documents before submitting them to avoid any mistakes.
Then, you will have to pay bankruptcy fees to proceed. The cost for Chapter 7 bankruptcy is usually around $335.
You must attend the meeting of creditors.
After the trustee evaluates your petition, you will have to attend the meeting of creditors, also known as the 341 meetings. Here, the trustee and your creditors will ask questions about your bankruptcy filing. If all goes well, you will be able to proceed with the remaining requirements.
Then, complete a financial management course.
Before you can obtain your debt discharge, you will have to complete the second court-required course, called a debtor education course or financial management course.
The court will handle the rest.
The rest of the process is in the hands of the court. They will analyze your petition thoroughly. If nothing goes wrong, you will get your debt discharged a few months after the meeting of creditors.
However, if the court finds signs of fraud or an error in your paperwork, your petition may be denied. In these cases, you should look for a reliable bankruptcy attorney who can help you appeal the decision.
How can you find a bankruptcy attorney near you?
Now that you know the rules of chapter 7 bankruptcy, you may want to work with a reputable attorney to start your bankruptcy process the right way.
You can find excellent bankruptcy lawyers through a simple search on Google, Bing, or any search engine of your choice.
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