What Happens In a Chapter 7 Bankruptcy?

When contemplating the possibility of a Chapter 7 bankruptcy filing, one of the first things that anyone will typically contemplate is what exactly this process will involve.  You might wonder which debts are resolved through Chapter 7, as well as how they are dealt with and what timeline this occurs on.  You might also wonder what the timeline of the bankruptcy filing looks like generally, as well as whether any appearances are necessary, and what the court might expect you to do post-filing.  Herein, we shall analyze and answer these questions.  

Firstly, the debts resolved through Chapter 7 are dealt with through a process known as the “bankruptcy discharge”.  Essentially, this discharge eliminates the personal liability of the person filing bankruptcy with respect to any of the debts that they might hold that are eligible for discharge.  These debts include any unsecured debts held in their name that are not exempted from the discharge under the bankruptcy code, as well as any secured debts that the filer may owe for items that they wish to surrender through the bankruptcy.  This discharge occurs roughly 60 days after the conclusion of something known as the “First Meeting of Creditors” (also referred to as a 341 hearing). 

This hearing is typically the only hearing that you will be required to appear at during the process of your Chapter 7 filing, and it is typically held over zoom.  It takes place roughly one month after the bankruptcy is filed, and typically involves the trustee (the federally appointed official overseeing your case) asking you questions (many of which can be answered yes or no) over the course of a 5-10 minute video call.  After this hearing finishes, the only remaining step prior to the discharge is to comply with any remaining requests of the court concerning providing them with relevant documentation or resolving claims for non-exempt assets.  In speaking with your attorney, they will provide you with guidance and insight on how this takes place.  

Thus, the process of pursuing a Chapter 7 is both straightforward and relatively brief, while the relief that it offers is profound and swift.  Chapter 7 protects you from creditors from the moment your case is filed, and before you know it, it has already run its course and wiped out your liability on the debts in question, forever!  In working with your attorney, they will assist you with navigating not only the process of preparing your case for filing, but also with preparing you for your appearance at the first meeting of creditors, as well as fulfilling any requests made by the court afterwards. 

CALL NOW FOR A FREE STRATEGY SESSION FROM AN MN BANKRUPTCY LAWYER AT LIFEBACK LAW FIRM

So, when the time is right, or when you are ready, please don’t hesitate to reach out to Minnesota’s most kind and helpful bankruptcy law firm by going now to www.lifebacklaw.com.