Bankruptcy is one of the things that make people shiver when they think about it. This is because when you reach such a point, you have everything to lose unless you find a good attorney. However, chapter 7 Monterey process is rather straightforward. You will be required to spend most of your time completing petitions about the bankruptcy, schedules, filling forms, etc. Also, you will be required to list all your debts, assets and financial transactions among others. Below are the basic steps that are involved in the bankruptcy process.
The first and most critical step is getting mandatory counseling on credit. The counseling must take place during the six months before you file for the bankruptcy. This is a law that was added in 2005 when the bankruptcy laws were revised. Hence, you must get the counseling from an approved agency by the United States office of the trustee. If you do not get a counselor, you have to notify the court to dismiss your case.
After the counseling, you are required to file the petition including other vital forms. You must file these documents before the case. The paperwork includes the petition, your financial information, a list containing your expenses and income. The court will use these forms to determine your eligibility. Thus, make sure you have included all the vital documents.
Then, the trustee takes over after you file the forms with the court. The court then appoints a trustee to handle the entire case for you. The trustee will then review your paperwork then distribute your nonexempt property to your creditors. Also, you must provide the trustee with a copy of your recent tax return. Then, the court will notify you when your meeting with the creditors will take place.
After this, you will be determined whether you are eligible for the case or not. This happens after the trustee reviews all the information you provided. The court will then decide on your eligibility. If you fail the means test, it means that you are not eligible. Thus, you will have to repay your creditors as in chapter 13.
If you have any nonexempt property, it is worth will be calculated. If the property is worthy, it will be sold. Then, your creditors will be given the money. If it chances that you have secured any debts that have been backed by some collateral, you are advised to return the property before the creditors seize it.
After filing and before you are given your discharge, you have to take a financial management course. This is a requirement that was added in the year 2005 when the bankruptcy law was being amended. After that, you will get the discharge that takes three to six months after you file.
After receiving the discharge in the mail, your bankruptcy case will be closed officially. This happens after a few days or weeks when you are granted the discharge. When the case is closed, you will no longer be held liable to all your creditors. This means that you can have a fresh start and move on with your life.
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