How Chapter 7 Works

From your point of view, you have already begun the process of taking advantage of debt relief through Chapter 7 bankruptcy by seeking information and an attorney who can help. A free initial consultation with a lawyer at Prescott Pearson & Tande, PA, will help clarify whether you are eligible for Chapter 7 bankruptcy and how to prepare for it. Some of our clients spend a few months getting their ducks in a row before actually filing for bankruptcy. During that time, they can retain us and pay their attorneys' fees in installments.

Once all paperwork has been completed and all fees have been paid, the bankruptcy filing can begin.

From the government's point of view, a Chapter 7 bankruptcy begins when a debtor files a petition with the bankruptcy court. This should take place in the area where the person lives. Along with the petition, the debtor should document the following for the court:

  • Assets and liabilities
  • Current income and expenses
  • A statement of financial affairs
  • A list of any outstanding contracts or unexpired leases
  • Tax returns
  • A certificate of credit counseling
  • A copy of any debt repayment plan developed through credit counseling
  • Recent pay stubs covering the 60 days before filing
  • A statement of monthly net income and any anticipated increase in income or expenses after filing
  • A record of any interest the debtor has in federal or state qualified education or tuition accounts (529 college tuition savings plans)
  • Court fees
  • The bankruptcy petition itself, including a list of creditors, a list of all property and a detailed list of monthly living expenses

A married couple may file a joint petition or individual petitions. Married people filing separately or individually must also submit this information regarding their spouses' income, assets and expenses.

After the filing of the petition, the debtor will receive a notice from the court of the date of the required 341 creditors' meeting. Despite the name of this hearing, creditors almost never attend. You, the petitioning debtor, and your attorney will attend this meeting with a court-appointed trustee. The trustee will ask you to confirm the facts of your case and may ask for clarification of any questionable information in your petition.

All debt collection efforts by your creditors who receive notification of the bankruptcy are prohibited from the time of the bankruptcy filing. They must cease all collection, garnishments and levies. After the 341 hearing, you can await notification of your debt discharge. If all goes well, this should take place within a couple of months.

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To learn more about how Chapter 7 works, call or contact our St. Paul and Minneapolis Chapter 7 bankruptcy attorneys today. We offer free initial consultations, quality services at competitive rates and effective representation statewide.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.