Chapter 7 is the most common form of bankruptcy that is filed. It can also be referred to as liquidation or straight bankruptcy. It is actually what the majority of people think about when the word bankruptcy comes to mind. For this process, there is appointment of a trustee by the court who will oversee the case. Part of their role is taking assets of the person and selling them to pay creditors. When considering chapter 7 Monterey residents need to know what is involved.
Before one files for a petition, they will need to bring together all financial records like loan documents, statements from the bank and credit card statements. The information will be used to fill out statements of financial affairs, bankruptcy petition and schedules. The same is the case for all other documents which will be filed by the courts. In essence, one will need to open up about their financial position.
Almost all persons that look to file for chapter 7 petition should go through credit counseling. The sessions are overseen by qualified credit counselors before filing of the case. The sessions need to be done in person, over the phone or online. This is very important because some debtors never have information on the options they have. Credit counselors will come up with a number of options that keep the person from bankruptcy.
When petitions are filed under chapter 7, it stops most collection actions against debtors and their property. It does not however stop some actions which are listed in the bankruptcy code. In addition, the stay orders could only be effective for a short time in some instances. As long as stay orders are in effect, creditors are not to initiate lawsuits or even wage garnishments. The clerk in charge will give notice of bankruptcy to creditors whose addresses and names have been provided by the debtor.
Some 20 to 40 days after filing of the petition, the trustee in charge of the case will hold a meeting with creditors. For that meeting, debtors are put under oath and both the trustee and creditors can ask questions. The meeting has to be attended by the debtor so that they answer any questions that arise.
If a petition is field jointly by a husband and wife, they are required to both attend the meeting of creditors. Ten days after the meeting, the trustee is supposed to issue a report to the courts. They will give a report whether that case can be assumed as an abuse to court processes considering what is stipulated in the means test. The test will determine how eligible one is for filing of cases under chapter 7.
It is very important that debtors cooperate with trustees and offer all financial records and documents which are requested. The debtor is asked questions during the meeting so that it is confirmed they are aware of potential consequences of seeking discharge in bankruptcy.
It is important to obtain professional assistance when you are filing for bankruptcy. It could be from a friend that is trusted or an attorney. Actually, you are better off getting professional advice about the procedure.
Get a summary of the factors to consider when choosing a Chapter 7 Monterey lawyer and more information about an experienced attorney at http://www.centralcoastbankruptcy.com now.