Chapter 7 is one of the types of bankruptcy (others are Chapter 11, Chapter 12, and Chapter 13). It is what people usually mean when they say "bankruptcy".
A chapter 7 case begins with the filing of a "petition" with the bankruptcy court. A husband and wife may file a joint petition or they may file individual petitions. If only one spouse owes money, the other does not have to file bankruptcy.
The petition is actually a three page document that invokes the protection of the court. Additional papers that must be filed are the schedules (a listing of assets, debts, income and expense) and the statement of affairs (a brief financial biography), a statement of intention, and a calculation of "current monthly income".
To prepare the bankruptcy papers to file with the court, we need copies of all bills or a list of all creditors and the amounts and nature of their claims; the amount and source of the your income; a list of all of the property you own, and a detailed list of your monthly living expenses, such as mortgage or rent payments, utilities, food, clothing, medical expenses, transportation, insurance payments, car payments, etc.
A "meeting of creditors" is held about 30 days after the paperwork is filed. Depending on which county you live in, the meeting will be in St. Cloud, Fergus Falls, Mankato, Duluth, Minneapolis, or St. Paul. The debtor (or debtors) must attend the meeting. Creditors are permitted to attend, but very seldom do so.
The trustee will swear you in and ask questions regarding the your financial situation and the contents of the paperwork you filed with the court. Sixty days after the meeting with the trustee, you receive a "discharge". This discharge releases you from most debt. Exceptions include child support, alimony, many taxes, debts incurred by fraud, personal injury stemming from a DUI, and student loans. Discharged creditors' claims are wiped out, and they cannot collect them after your discharge.
No comments:
Post a Comment