Credit Counseling Course
Before filing for Chapter 7 bankruptcy, you have to complete a credit counseling course from a credit counseling agency. Through this course, you will get better clarity of the situation through which you can make a wise and well-informed decision.
This course is very helpful and will allow you to explore alternatives to bankruptcy and help you understand all the associated implications of your financial decision.
Gathering Financial Documents
The next step is to gather all the essential and relevant financial documents. To complete the bankruptcy petition, you have to gather financial documents like tax returns, pay stubs, bank statements, and a list of your debts and assets. When you hire a bankruptcy law attorney, they will guide you through all the needed documents.
Filing The Bankruptcy Petition
After gathering all your financial documents, you’ll now file your bankruptcy petition with your local bankruptcy court. Through this formal document, you can initiate your bankruptcy process.
Remember that a filing fee is generally required unless you qualify for a fee waiver. Always follow the suggestions of your bankruptcy lawyer; they will guide you on every step.
An automatic stay takes effect once your bankruptcy petition is filed. This stay benefits you as this legal order prohibits creditors from attempting to collect debts from you. It also provides a much-needed respite from harassment.
Meeting of Creditors (341 Meeting)
The next step after you get an automatic stay is meeting creditors, also known as the 341 meeting. You will attend this meeting one month after filing, where the bankruptcy trustee and creditors will ask you questions about your financial condition.
This meeting is essential for the trustee as through these question-answered sessions, they will understand your assets and debts.
The next step after the 341 Meeting is asset liquidation. A trustee is appointed to liquidate assets and exempt assets to repay your creditors. Knowing that only some of your assets are at risk is essential. In this situation, there are exemptions to protect your main residence and your necessary personal belongings.