Step 1: Find an attorney
It is important that you find an attorney that practices bankruptcy law in your district. Whether it be Los Angeles, San Diego, Orange County or Riverside. A qualified attorney can determine if you qualify under the bankruptcy laws and whether you should be filing for bankruptcy in the first place. Also, there are many important issues to consider such as, will your assets such as money, cars and homes be protected.
Step 2: Gathering Documents
In order for your attorney to do his job, he or she will need financial documents and intake from you and your spouse. For example, any diligent attorney will ask for proof of income (pay stubs), bank statements, a list of assets, profit and loss statements if you run your own business, and a list of retirement accounts. Our office also asks for further documents and will give you an intake form to fill out. It is imperative that you disclose all information in order that we have your Chapter 7 bankruptcy proceed as quickly and smoothly as possible.
Also before you file you will have to finish a credit counseling course. This course can be taken online or by telephone.
Step 3: The Bankruptcy Petition is filed with the appropriate court
The petition and supporting schedules are filed with the bankruptcy clerk who turns them into court records. The bankruptcy stay goes into affect an your creditors are barred from taking any collection action. For example, any foreclosures will be stopped until the bankruptcy ends or the lender asks permission from the court to continue with the foreclosure. Also, any court proceedings such as collection law suit will also stop. Furthermore, all wage garnishments or levies will also be stopped.
In addition the court will issue a notice of the creditors 341 hearing examination. The examination will take place approximately 30 days after the paperwork is filed. The trustee’s job is to review your paperwork and take possession of any non exempt property. Finally the court notifies creditors that you have filed for bankruptcy by mailing a notice of filing to them.
Step 4: Provide your most recent tax return to the Trustee
Your most recent tax return is given to the trustee and sensitive information such as your Social Security will be blocked out. Some trustees will ask for more information such as bank account statements, and older tax returns.
Step 5: The 341 Examination Hearing is Held
This hearing most of the time, is the only personal appearance most filers make. You will need to bring your drivers license and social security card to this meeting. The judge assigned to your case is not in attendance at this hearing. The trustee will swear you in and ask you some questions regarding your petition. Creditors are welcome to join the meeting and further questions however they rarely do.
Step 6: The means test is applied in appropriate cases
The U.S. Trustee starts a process leading to dismissal or conversion of your case to Chapter 13 if your papers show that you have adequate income to fund a repayment plan.
Step 7: Negotiations are held regarding nonexempt property if any
If you have nonexempt property, the trustee will give you a chance to see if you can purchase the property back. Otherwise, the trustee will require you to hand over the property so it can be sold for the benefit of the unsecured creditors. However, in the majority of cases your property will be exempt and protected.
Step 8: Secured property is dealt with:
If you owe money on secured property such as cars,creditors may require you to reaffirm the debt in order to keep the property. However, many times you can continue to pay and keep your property without reaffirmation.
Step 9: You attend a Personal Financial Management Course:
You must undergo personal financial management counseling course before you can get your discharge.This course can be done over the internet or phone. You must file the personal financial course no later than 60 days after the initial 341 examination. We will file this course certificate for you after we receive the certificate.It is imperative that you finish this course because the case can be closed without discharge for failing to do so.
Step 10: The court Grants your Discharge and the case is closed:
The court mails a notice of discharge that discharges all debts that can legally be discharged, unless the court has ruled otherwise in your bankruptcy case. This happens roughly 90 days after you file. A few days or weeks after your discharge the case will be closed.
As you can see there are a lot of steps in the process of filing for Chapter 7 bankruptcy. Although these are the basic steps every bankruptcy is different and many times additional steps may be needed. Here at the Law Offices of Rami N. Nabi we make the process for you as easy as possible and keep you informed through out the whole process.