Chapter 7 Bankruptcy Review -Detroit Bankruptcy Lawyers
Chapter 7 bankruptcy is the most popular type of bankruptcy. It is also referred to as liquidation bankruptcy. This type of relief clears out your debts with only a few exceptions: child support, student loans, and taxes within the last 3 years. It can be filed by either one person or by a married couple. From filing to discharge, it takes approximately 4 months to wipe out the debt.
When compared to Chapter 13, Chapter 7 bankruptcy is the most common bankruptcy filed by most married couples and individuals. The cases received under this type of relief are classified as either consumer debt or business debt. Between these two, consumer debt is the most common and includes debts such as credit cards, mortgages, personal loans, medical bills, taxes, and vehicle purchases. Business debts on the other hand refer to debts that occur out of business operations or business ownership.
If the client debt falls on consumer debt, then it is a requirement that he or she must go through a credit counseling class before filing the petition and a debtor education class before they can receive a discharge. Various federal agencies have been given the role of carrying out the counseling and have been approved by the US Trustee.
The various aspects that are covered by Chapter 7 bankruptcy may seem complicated but detroit bankruptcy lawyers will help you to understand each of the steps and requirements.
Before the case is filed, the attorney prepares the bankruptcy documents. The client is required to disclose all their assets and creditors. When the case is filed the bankruptcy court will send out notice of filing to all the creditors listed in the bankruptcy.
Under Chapter 7 bankruptcy, clients will not lose their possessions. The bankruptcy code protects some of their possessions such as household goods and furnishings, jewelry, books, and clothes. The client should disclose all of their possessions even if they think they have no value. They should understand that everything they own is an asset and therefore must be listed in the bankruptcy. These things will be exempted and protected in the bankruptcy.
Once the bankruptcy is filed, the court schedules a 341 Meeting of Creditors. This takes place about 30 days after the date of filing. It is very painless and takes about 5 minutes. The client, the attorney, and the trustee sit at a table and the client verifies their social security number, that they signed the documents, and that their assets are what has been listed in the bankruptcy. The trustee may also ask any additional questions they have regarding the bankruptcy paperwork. While this is called a Meeting of Creditors, it is rare that any creditors appear.
After the 341, the court has to wait two months to allow for any creditors or the trustee to object to the debtor receiving a discharge. In the rare case that this happens, our experienced bankruptcy attorney can help you through that and help you receive a discharge.
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