Filing for Chapter 7 bankruptcy doesn’t have to be complicated because most bankruptcies follow a systematic and predictable course, and below is a list I give my clients when I explain the bankruptcy process. Not only does it give them an overview of the work, but they use it to take notes and refer to them later as needed. Using it as a guide when you talk to your own attorney will help you clarify any questions you may have about the process as well.
1. Collect the following financial documents:
- 2 year tax return
- 6 months bank statement
- 6 months payslip (or income statement)
- Monthly billing report
- Credit report
2. Review the documents with a bankruptcy attorney to determine if the bankruptcy filing is appropriate.
3. If bankruptcy is the best course of action, the attorney will prepare a petition.
4. Complete a pre-filing credit counseling course and give your attorney a certificate.
5. See your attorney to review and complete the petition.
6. Once filed, the court will notify your creditors of bankruptcy and set a date for your court appearance with the bankrupt trustee. This is called the 341 Creditors’ Meeting.
7. Your attorney will send the required financial documents to the trustee prior to the 341 Creditors Meeting.
8. At the 341 Creditors’ Meeting — which will be attended by your attorney — the bankrupt trustee will ask you to verify 1) the accuracy of your petition, and 2) your identity via your social security card. Take it with you. Creditors may also appear to ask you questions about your debt; however, this rarely happens.
9. After the Creditors’ Meeting 341, take an online debt management course and present your attorney with a certificate.
10. Your attorney will provide the court with a second course certificate and any additional documents that the bankrupt trustee may request.
Once you have completed these steps, there is a waiting period of about two months. After this time, you and your attorney will receive a notice of your release, meaning all of your eligible debts will be written off.
The court did not provide a list of these debts — they were by law. If creditors try to collect debts incurred before you filed your petition, provide your bankruptcy case number and filing date, along with your release date. If they hold out wrongly, which most don’t, contact your attorney.