The Chapter 7 Bankruptcy Process

Many people are reluctant to file bankruptcy, or to even consult with a bankruptcy attorney, because the process is unknown and seems frightening. So much so, in fact, that they are uncomfortable even asking for an explanation. For this reason, we will outline, below, exactly what happens when you file bankruptcy.

Once you have retained our firm you are free to so advise your creditors who keep calling your home at all times of day and night. They will .,generally stop calling you for a month while we prepare your papers. If the creditors call our office, we will confirm that you have retained us.

After we have filed your papers with the Court, it is illegal for creditors to contact you or continue any collection actions or lawsuits against you. By providing them with your case number, you will stop any residual calls.

The first court hearing is held about a month after your case is filed.

In chapter 7 cases, the hearing is usually conducted in a modem office building in downtown Brooklyn (for Staten Island, Brooklyn and Queens cases) or on downtown Manhattan (for Manhattan and Bronx cases). This is not actually a courtroom, but rather a classroom setting, in which about 25 people like you will be sitting in rows of chairs, and the Trustee will sit at a desk in the front of the room facing you. One at a time, each case will be called, and you will sit at the table with one of our attorneys to assist you.

The Trustee (a bankruptcy attorney appointed by the Court to review your file ) will have a copy of your papers. First, he will ask you to confirm that you signed the papers and that they are accurate. Then he will ask you about your answers. He will want to know if you have ever owned any real estate. He will ask for the highest balance in any bank account within the past two years, whether you have the right to sue anyone, and will want documentation of the value of any real estate. And he will ask about recent financial transactions. He will review the amount of your total debts, and ask questions about any unusual answers on your schedules.

Creditors have the right to appear and ask questions, but don't usually appear. Recent unusual credit card activity, however, may prompt a creditor's appearance. Sometimes a Department Store may have a representative present to ask if you want to keep your card, in exchange for paying back a portion of your old bill.

If the Trustee requests further documentation about a particular transaction, the hearing may be adjourned for a second date, but usually the Trustee is finished after the first meeting.

Creditors then have two months to object to their specific debts from being discharged. This could happen if you recently used large amounts of credit, or transferred balances to their card, or if you owe certain debts in a divorce case, if you obtained a loan based on a false financial statement, and in certain other limited and specific situations.

During this two month period creditors also have a right to object to your discharge of all debts. This would occur if it was discovered that you lied on your bankruptcy papers, and had recently transferred assets, or were concealing assets that you owned.

Usually, however, no objections are filed. About six months after your case is filed, you will receive in the mail a document entitled "Discharge of Debtor." This should be saved, along with a copy of the. papers you filed, to provide to creditors who bother you in the future.

If the trustee collects assets which you can't keep as exempt, then he will distribute them to your unsecured creditors (e.g. credit card companies); but the Creditors are prevented from pursuing you for those debts.

If you have accurately provided us with all relevant information, we will carefully prepare your bankruptcy papers, and we will be at your side throughout the entire process, to enable it to be painless, and to allow you start your life anew, without the burdens of past misfortunes always following you.

Although Chapter 7 Bankruptcy stays on your credit report for ten years, as soon as your case is filed, we can show you how to start building a new credit record. You should be able to buy or lease a new car in about a year. After Chapter 7, you can get a mortgage for a new home, under certain lending programs, after two years. Most importantly, starting the day after your petition is filed, you can start saving money without worrying about your old creditors taking it away. Finally, the bankruptcy process will bring you a keen awareness of your current living expenses, and what income you have available to meet these payments, once your old debt is wiped away. Instead of using all your free earnings to pay never?ending credit card interest and late charges, you will be able to pay all your current living expenses with your current earnings