Chapter 7 Bankruptcy: What Happens When You File

When you are looking at all of your options for debt relief, you may consider what takes place once you file for bankruptcy. Bankruptcy is a process that will set off a chain reaction of certain events. Some of these events are designed to protect you, whereas others are designed to protect your creditors. Keep reading to learn about what happens when you file for Chapter 7 bankruptcy.

A Bankruptcy Trustee Will Be Assigned to You

You will be assigned a trustee, who will directly oversee your bankruptcy filing. They will administer your overall estate, examine all of your paperwork, and ask questions and/or preside at the creditor meeting.

An Automatic Stay Will Take Effect

Once your filing has taken place, an automatic stay will take effect. What this does is keep creditors from continuing to collect the debt against you. In other words, your creditors will be unable to continue legal proceedings, creating or enforcing liens against your property, foreclosing on your property, repossessing your property, communicating with you, levying your bank accountants, garnishing your wages, etc.

A Creditor Meeting Will Be Scheduled

This meeting is a hearing that is held by your trustee during which they will ask questions regarding your bankruptcy paperwork, financial circumstances, property, etc. There is no judge present, but your bankruptcy attorney is. Though they normally do not attend, creditors do have the right to be present at this meeting.

A Reaffirmation Agreement May Be Received

It is possible that you will receive a reaffirmation agreement from your creditor that asks you to reaffirm your debt. By doing this, it will not be discharged during your bankruptcy filing. Your attorney may recommend that you sign these agreements, especially if you are hoping to keep your vehicle or home.

A Financial Management Class Will Be Scheduled

Before your bankruptcy discharge can be obtained, an individual financial management course must be successfully completed. This course is usually in addition to your credit counseling that was required prior to being able to file for bankruptcy.

A Discharge Is Received

In the end, you will finally be able to receive your official discharge. Generally, the majority of debt can be discharged by filing a Chapter 7 bankruptcy. However, there are some exceptions, such as child support, taxes, etc. By having your debt discharged, you will be able to begin your life with a clean slate with no legal obligation to repay the debt that has been discharged.

If you would like to learn more about filing for Chapter 7 bankruptcy, contact a bankruptcy attorney in your area or reach out to a law firm like Martinez Law Firm.