The process of filing for Chapter 7

New York residents who are interested in information about bankruptcy may benefit from specific details of how the bankruptcy process works. A Chapter 7 bankruptcy for an individual begins with the person requesting it filing a petition with the courts. When filing a bankruptcy petition, certain other information must be filed as well, including statements of current income and expenditures, financial records, assets and liabilities and copies of recent tax returns. If most of a individual’s debt is consumer debt, such as credit card debt, the debtor must also file additional documents including a certificate of credit counseling.

Fees must be paid for filing for bankruptcy. Fees may be paid in up to four installments, with the court’s permission. The court may waive the fees for bankruptcy filers whose income is less than 150 percent of the poverty level. Lists of debts and creditors must also be provided, in addition to statements of living expenses, property owned and income. Information for both spouses must be provided even if a married person is filing individually.

When Chapter 7 is filed, creditors are halted from making most types of collection efforts, including wage garnishment, lawsuits and telephone calls asking for payment. The bankruptcy clerk notifies the creditors whose names and contact information were provided during filing. A meeting of creditors is held, which the person filing for bankruptcy must attend. After the meeting, a determination is made on the debtor’s eligibility for Chapter 7 bankruptcy.

Bankruptcy may be an appropriate and necessary form of debt relief in many cases. The decision of whether or not to file can be made with the assistance of an attorney with experience in bankruptcy law.

Source: Findlaw, “Chapter 7: How it Works“, September 04, 2014