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What are the Steps in Filing Chapter 7?


Consult an Attorney Before Filing Chapter 7

Talking to an experienced bankruptcy expert is always a good idea, particularly before filing Chapter 7 and changing your financial life forever. A debtor who has more bills than income coming in may think that bankruptcy is a foregone conclusion. And it may be. But don't presume Chapter 7 is the best choice and don't ignore at least looking at any possible alternatives to bankruptcy. A bankruptcy attorney can look at your specific financial situation and help you decide the best bankruptcy option for your circumstances.

Take a Credit Counseling Course Before Filing Bankruptcy

There is a list of approved credit counseling courses available with the bankruptcy trustee. The course must be completed within 180 days of filing for bankruptcy and a certificate that the course was taken must be included with bankruptcy filing documents. Not only does the course fulfill a new bankruptcy requirement, but it allows a financial expert the opportunity to look over your finances make a recommendation whether any alternative to bankruptcy exists.

File the Bankruptcy Petition and Supporting Information

The moment of filing Chapter 7 triggers the automatic stay protections under federal bankruptcy law. That means creditors cannot take any collection actions, even phone calls, and foreclosure actions that have not been completed must be put on hold. The court also needs a statement of financial affairs, a detailed list of debts and assets, a current monthly budget and a statement of intent with regard to any secured property. The filing fee of $274 also will be due, although a debtor can pay the fee in up to 4 monthly installments or petition to have the fee waived. If the debtor makes above the median salary in the state, the court will also need a completed means test. The means test determines if the debtor has enough disposable income to pay to creditors. If he does, the filing is presumed to be an abuse, and the debtor will either have the case dismissed or be given an opportunity to convert to a Chapter 13 case.

Complete a Debtor Education Session After Filing Chapter 7

The debtor education course also must come from a list approved by the bankruptcy trustee and proof that the course was completed must be presented before a debtor can receive a discharge after filing Chapter 7. The debtor education course is designed to teach a debtor how to create a budget and other financial issues to have a better chance of not falling back into any poor financial habits.

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