In a Chapter 7 bankruptcy, the filing party turns in his assets to the bankruptcy court. The court disperses all of his assets to creditors, and the filing party gets nearly a clean bill of credit health. Under a Chapter 7 bankruptcy, there is no repayment plan for the filing party to pay back debts. The debts are forgiven in exchange for the liquidation of assets.
Those filing for Chapter 7 bankruptcy must undergo credit counseling from an approved credit counseling agency. Such a credit counseling course helps the filer to obtain credit more wisely and to spend money more carefully in the future.
When filing for Chapter 7 bankruptcy, the filing party must submit all assets and debts to the bankruptcy trustee assigned to his or her case. The filing party must also appear before the bankruptcy trustee to answer questions about his or her debts, so the trustee and the court may make an educated decision about whether to discharge the debts, and to whom the assets should be dispersed. The items that must be fully disclosed to the trustee include:
- All creditors and amounts owed
- All debtor property
- All current income of debtor
- All current monthly expenses of debtor
The trustee and bankruptcy court make the decision as to whether to discharge the debt. This process typically takes 60 to 90 days, depending on how many creditors respond to the debtor’s bankruptcy filing and the complexity of the case. A trustee may deny the discharge of debt if he, or any creditor, believes that any documents submitted were fraudulently produced, or were not the debtor’s true financial records.
When filing for Chapter 7 bankruptcy, there is a great deal of legal paperwork required by the courts, as well as a set of requirements needed to be fulfilled in order for the bankruptcy to be approved. A Morris County Chapter 7 bankruptcy attorney can file the necessary documents on behalf of the debtor and can lead the debtor through the necessary steps to successfully file for bankruptcy. A Morris County Chapter 7 bankruptcy lawyer acts as knowledgeable representation during the trustee hearing, and throughout the entire process, so the debtor can rest assured that the filing is being handled correctly.