A Chapter 7 involves the liquidation of an individual’s nonexempt assets by a court appointed trustee to pay off the individual’s creditors in accordance with the Bankruptcy Code. Under Chapter 7, the individual may lose property as a result of the liquidation of assets.
What is credit counseling?
Before you file for bankruptcy, it is required by law that you must take a credit counseling session with a certified service. The sessions can be done live or online. These sessions cost between $25-50 although you might be able to request a waiver of the fee. Once you complete the course, you will receive a certificate of completion which you will need to file your case.
What is the “means” test?
A debtor must financially qualify to file a Chapter 7.
This test determines whether you qualify to file a Chapter 7 petition for bankruptcy. If your income is above the state’s median income, then there must be a showing that there is no excess income to put the petition into a Chapter 13 repayment plan situation.
It does this by deducting specific monthly expenses from your “current monthly income” (your average income over the six calendar months before you file for bankruptcy) to arrive at your monthly “disposable income.” The higher your disposable income, the more likely you won’t be allowed to use Chapter 7 bankruptcy.
How much does it cost?
The filing fee for a Chapter 7 in the U.S. Bankruptcy Court of Western Washington is currently $306. It was recently raised in November 2011.
Are all my debts discharged with a bankruptcy?
Most consumer debts are discharged in bankruptcy. This includes credit cards and hospital bills. Student loans, IRS taxes (within the last 3 years), alimony, child support, debts from illegal activity and any account where you charged more than $600 in the last 90 days prior to filing cannot be discharged in bankruptcy.
What is debt credit counseling?
Not only does one have to take a credit counseling class, the debtor must complete a debt credit counseling class 180 days before discharge of your debts in bankruptcy.
What is a trustee?
Once you have completed the pre-filing credit counseling and your case is filed with the bankruptcy court, it will be assigned a trustee. The trustee will review your petition to determine whether to grant your petition for bankruptcy. You will be interviewed by the trustee so that he or she can go over your petition personally.
It’s important to cooperate with the trustee and provide them with the necessary financial information to help expedite your case.
What is a 341 meeting?
“341” refers to the section in the Bankruptcy Code. This meeting occurs at the courthouse where you filed your Bankruptcy petition. At this time, we will go to the Courthouse and meet the trustee. The trustee will review your petition and discuss your case as described previously. At this time, any creditor who believes they have a claim on your debt may show up to contest the bankruptcy discharge.