Process of Bankruptcy: Chapter 7
The following is a list of the most common steps in a typical Chapter 7 Bankruptcy case. Your bankruptcy attorney will notify you if you are required to do anything more than what is listed below. Please use this as a general reference for your case. If you have any questions during the process of bankruptcy, please contact our office.
1. Take the required Credit Counseling Course. Every person who files for bankruptcy is required to take a credit counseling course before filing for bankruptcy. The credit counseling class can be taken at www.debtorcc.org for a fee of $14.95 per household. The course only takes about 1 to 1.5 hours to complete and is available 24 hours a day.
The website describes the class as “First Course Pre-Filing Credit Counseling”. When you start your credit counseling class, the website will ask you for your attorney’s email address. Please enter the following email address: email@example.com. After you complete the course, a certificate of completion will be emailed to our office.
2. Prepare the Bankruptcy Petition via Phone with our Office. Nearly all bankruptcy lawyers require clients to fill out a lengthly bankruptcy questionnaire. A paper questionnaire is usually over 50 pages long and an online questionnaire is confusing and difficult to fill out. We do not require our clients to do so.
After years of practice, we have worked to make the entire process easier for our clients. Instead of a lengthy questionnaire, we prepare your petition with you over the phone. This eliminates the confusion and stress of paging through 50 pages of questions. Once you sign your retainer agreement, we will make an appointment for to prepare your petition over the phone.
3. Provide required documents to our office. The following documents are required to file your bankruptcy case.
- Tax Returns – In general, we require the last two tax returns you have filed. If you have not filed a tax return recently, we require a copy of the last tax return you have filed.
- Pay Stubs – If you are or have been employed in the past 6 months, we require copies of your pay stubs for 7 months prior to the date we file your bankruptcy case.
- Bank Statements – We also require 3 months of your bank statements. Please include all bank accounts.
- Secured Debt Statements – If you are paying a mortgage or making car payments, we will need your most recent statement.
- Financial Statements – If you have any other financial accounts, such as investment accounts, life insurance policies (with a cash out value), retirement accounts, or any other account you can cash out, we require a copy of your most recent statement.
- Tax Debt Statements – If you owe any taxes to any governmental organization, please provide our office with a statement of the tax debt.
- Lawsuit Documents – If you have been sued by any creditors or are involved in any other lawsuits, please provide our office with a copy of the documents.
- Any other documents requested by your attorney. If the attorney you met with asks for a copy of any other documents, please provide them to our office.
4. Review your bankruptcy paperwork. Once step 1-3 are completed, you are required to meet with our attorney to review your bankruptcy paperwork and sign the appropriate documents. You can meet in person or over the phone. Our office will generally file your bankruptcy case on the following Friday after you meet with our attorney.
5. Bankruptcy Case Filed. Once your bankruptcy case is filed, our office will email you your case number and notify you of the location, date and time of your Meeting of Creditors. If creditors call you after your bankruptcy case is filed, please inform them of your bankruptcy filing and give them your case number. Filing for bankruptcy give you protection under the Automatic Stay. The Automatic Stay prohibits your creditors from taking any action to collect, including calling you, sending you letters, and proceeding with any lawsuit.
6. Take the required Financial Management Course. After your bankruptcy case is filed, you are required to complete a course in Financial Management. You can take the course at the same website where you took the Credit Counseling Course (www.debtorcc.org). The Financial Management Course is described on the website as “Second Course Post Filing Debtor Education” and the cost is $9.95 per household.
7. Attend the Meeting of Creditors. Approximately 4 to 5 weeks after your bankruptcy case is filed, you are required to attend the Meeting of Creditors. The location of the Meeting of Creditors will be in the email our office sent you after we filed your bankruptcy case and you will receive a notice from the Bankruptcy Court in your mail of the location, date time and requirements. When you attend the Meeting of Creditors, you are required to bring a valid driver’s license (passport or identification card) and social security card (no copies). Check out our blog post on “What happens at a meeting of creditors?” to learn more. If you fail to bring proof of your identity and social security number, your Meeting of Creditors will be continued to a later date. Please remember to bring your social security card.
8. Reaffirmation Agreement. After the meeting of creditors, you will have to make a determination about whether or not to sign a reaffirmation agreement. Your attorney will explain the process to you and the benefits of signing or not signing a reaffirmation agreement. However, whether or not you decide to sign a reaffirmation agreement, if your intention is to keep your car after your bankruptcy case, you should make sure to continue to make your car payments as automatic payments may be suspended once you file bankruptcy.
9. Discharge of Debtor. The Discharge wipes out your debt. It is why you have filed for bankruptcy. The earliest you can receive your Discharge is 60 days after your Meeting of Creditors. Your discharge should be processed within 90 days after your Meeting of Creditors.
10. Rebuild Your Credit. Immediately after you receive your discharge, you should start to rebuild your credit. Open a secured credit card (check out Capital One), and use it each month and pay off the balance for 1 year. Your credit score can be right below 700 within 1 year of your bankruptcy case. After the one year passes, open a regular unsecured credit card and use it and pay if off each month. 2 years after your bankruptcy case your credit score can be well above 700.
Filing for bankruptcy is a process wherein the attorney and client work together to file for bankruptcy and obtain a discharge. The Los Angeles Bankruptcy Attorneys at MacLean Chung Law Firm cannot file your bankruptcy case without your cooperation. Completing the requirements listed above to the best of your ability will help in the obtaining a discharge smoothly.