Chapter 7 Process - Discharge of Debts

1. Prior to the bankruptcy filing, the new bankruptcy law provides that the debtor must complete a credit counseling session with an approved credit counselor.

2. Debtor must sign a written retainer agreement and retain a lawyer prior to the bankruptcy with the fee paid prior to the filing of the bankruptcy.  Otherwise, the lawyer's fee will be discharged in debtor's own Chapter 7

3. Client must review and sign the bankruptcy petition forms for Chapter 7.

4. Attorney files the Chapter 7 and the court date stamps all forms and issues a case number.

5. The court assigns a Chapter 7 Trustee to the case,  schedules a Meeting of Creditors for debtor and creditors, and serves written notice of the bankruptcy filing and Meeting of Creditors on all of the creditors. The Meeting of Creditors is generally held within 30 days of the filing date. The notice provides a date (usually within 60 days of the Meeting of Creditors) within which creditors must file an objection to the discharge of the debtor.

6. At least seven days prior to the Meeting of Creditors, the debtor must provide copies of his or her current year's tax return and payroll stubs (received within 60 days prior to the filing of the Chapter 7 petition) to the Chapter 7 trustee.

7. The debtor must complete the Financial Management Course requirement by attending a financial management course offered by an approved provider.  The debtor attends the Meeting of Creditors, which is presided over by the trustee appointed to debtor's case. After asking questions, the trustee allows other creditors who attend to ask questions as well.

8. Debtor waits for the 60-day period to run. During this period, creditors may object to the granting of a discharge to the debtor.  Once the 60-day period expires, the court then issues debtor's discharge and mails all creditors with that discharge.  The bankruptcy case is then closed. Read more about Chapter 7 Discharge....

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