How Chapter 7 Works

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Brandon Bankruptcy Law Attorney

The Golden Law Group has helped thousands of individuals and families in communities throughout Florida’s Central Gulf Coast region with their debt relief needs. When people call the firm, they are often concerned about how much bankruptcy will cost and what the process looks like. While getting out from under heavy debt is most people’s primary goal, there are many misconceptions about going to court and what a bankruptcy lawyer can and cannot do.

Some form of bankruptcy laws have been on our national books for more than 200 years. In its simplest definition, bankruptcy is a means of filing for court protection from the actions of creditors who have the capacity and right to reclaim assets or property loaned in good faith. Generally, creditors want their money back.

When you file for bankruptcy, you will provide your attorney with all records of your income, property and debts owed. The financial information will be entered in a formula to determine whether you are eligible under the law to file for Chapter 7 discharge of debt. If your income and non-exempt assets are too high, in relation to your debt owed, you will not be allowed to discharge your consumer debt through Chapter 7. But don’t worry, Chapter 13 debt restructuring is still available to you, and there are many advantages.

If you are eligible for Chapter 7, simply pay a low down payment on the retainer fee to secure the representation of an attorney at The Golden Law Group. From the moment you sign the retainer agreement, you can start to tell bill collectors that you have a lawyer representing you. Under terms of the Fair Debt Collections Practices Act of 1977, creditors and collections agencies are required by law to deal ONLY through your attorney. Imagine what that will be like, for a change.

Your attorney will handle everything from there. He will gather your financial information and file the appropriate petition paperwork through the U.S. Bankruptcy Court, or if you don’t live in Manatee County, Hillsborough County or Sarasota County, the nearest bankruptcy court in your jurisdiction. The judge will review the information on the petition to determine whether you areeligible for Chapter 7.

Because bankruptcy is a legal process, your creditors will be given every opportunity to review the financial information and the petition for discharge of debt. Naturally, they will argue that the judge should make you pay them out of your listed assets. Some assets, such as equity you have built up in your home and retirement accounts will be exempt from judgment. In other words, the judge cannot order you to pay your creditors from those assets. Your creditors will investigate your financial information to determine whether it is an accurate and full disclosure of your financial resources. If the judge determines that you did not provide full disclosure, you may be charged with a federal felony fraud charge. But don’t worry. Most individuals who file Chapter 7 don’t have any assets available for judgment. The judge may also rule that any debt of more than $550 that you accumulated within 90 days of filing is also non-dischargeable.

The judge will give your creditors time and opportunity to defend themselves against discharging your debt. This will take several months. During this time period, you will be required by law to attend a special class on debt management. The class is available online or by telephone. Your attorney will refer you to a certified instructor in your area.

Approximately 30 days after the case is filed, a Creditors Hearing will be held. You must attend the hearing. You will not attend the meeting alone, an attorney from the Golden Law Group will be there with you. It is sometimes awkward to face your creditors in court, but it is the only time you will be required to appear in court throughout the entire bankruptcy process. However, most of the time no creditors appear so the only person you have to answer questions from is the Trustee. The Trustee is the person who is appointed by the Court to oversee the case. The Trustee will ask you questions about your income, your expenses, your assets and liabilities. If the Trustee determines that you have no assets which are available to pay creditors, he or she will file a report of no distribution with the Court. If the Trustee discovers that there are assets which are available to pay creditors with, the Trustee will liquidate the asset and pay the creditors. Most Creditors meetings take about 5 minutes. However, there are usually 5 meetings scheduled every half hour and the Trustees do get behind.

After the creditors meeting is concluded the creditors have 60 days to object to the entry of a discharge. The most common reason that a creditor objects to discharge is due to fraud by the debtor. Once you decide to file bankruptcy, it is very important that you stop using your credit cards. If you use your credit cards within a short time before filing your bankruptcy case, a Creditor may file an objection to your discharge. However, assuming no one files an objection to discharge within 60 days of the conclusion of the creditors meeting, your discharge will be entered.

Throughout the process, your attorney will attend many meetings with the judge, trustees and creditors to ensure that the petition goes smoothly. You may occasionally be asked to supply additional details about a particular debt, asset or income. Your Golden Law Group lawyer will do everything possible to handle everything at the law firm, so you can concentrate on your new life without debt. During the process, if a creditor contacts you directly to attempt to collect, contempt of court charges may result.

Get all of your questions answered. Contact The Golden Law Group to schedule a free, no-obligation consultation today.

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