How to File Chapter 7 Bankruptcy

When you’re drowning in debt, filing for bankruptcy in Carlsbad, CA can help you alleviate some of your financial woes. Bankruptcy helps pay back at least part of the debt and makes it easier for you to make a fresh start. More Americans than ever have been considering this route due to COVID-19—is Chapter 7 bankruptcy right for you? Read on to learn more.

Do you qualify for Chapter 7?

Chapter 7 completely liquidates most of your debt—some balances, like student loan debt, cannot be eradicated—as long as you pass the means test. The means test requires that you make the median or lower than the median average income amount for your state six months prior to filing. If you make more than the median, you may still qualify for Chapter 7 when you count exempt property and allowed expenses. If you’re cutting it close, consult with a bankruptcy attorney.

What do you need?

You’ll need financial documents to file for Chapter 7, including but not limited to your pay stubs for the past six months, tax returns for the previous two years, your recent bank account, retirement and brokerage statements, appraisals of real estate and any other major property or assets you own, your vehicle registration and any other documents related to your finances. This can include information about your debts and assets, such as student loans and other obligations.

Next, you’ll need to complete a credit counseling course. At this point, you can start filing the forms, either by yourself or with the help of an attorney. If you can’t pay the fees (most legal filings have fees attached), you can apply for a fee waiver.

The bankruptcy process

Whether you have an attorney or you’re filing your case on your own behalf, the proceedings will generally continue along the same lines: first, you’ll go to a meeting with the bankruptcy trustee, who will take the opportunity to ascertain your debt and its nature. If necessary, you or your attorney will file any motions or objections to protect your rights and the evidence.

Depending on how the case continues and which forms you filed in the beginning of the case, you’ll need to start acting on unsecured debts—for example, if you still owe money on a car, you can either pay it off (if possible) or return the car to the creditor to make up for the unsecured debt.

Next, you’ll attend a debtor education course, which is designed to educate you about proper debt management and make sure that you never have to deal with this situation again. Once you’ve successfully completed the course and the bankruptcy trustee has signed off on your proceedings, you will be granted a discharge. That means the creditors can no longer collect on your debt because it was legally discharged.

Do you need assistance filing a Chapter 7 bankruptcy proceeding in Carlsbad, CA? Gregory S. Hood, Attorney at Law, P.C. can help. Call us today to discuss your case and get started discharging your debt.

Read More