When you begin to consider bankruptcy as a possible solution, you will be faced with many decisions. One of those being, “is Chapter 7 bankruptcy right for me?” To best answer that question the Myrtle Beach bankruptcy attorneys at the Lam Law Firm have gone into detail about what a Chapter 7 bankruptcy is and how it may be the right decision for your unique situation.
Who May File for Chapter 7 Bankruptcy?
Any individual residing, domiciled, or having property or a place of business in the United States may file a Chapter 7 bankruptcy. An individual is not eligible to file a petition if, within the preceding 180 days prior to filing, (1) he or she was the debtor in a bankruptcy case dismissed for willful failure to abide by orders of the court or to appear before the court in proper prosecution of the case or (2) he or she requested and obtained voluntary dismissal of a bankruptcy case following the filing of a request for relief from the automatic stay provided by section 362.
In order words, if you had a case thrown out by the bankruptcy court for willful failure to abide by orders of the court, you cannot file for Chapter 7 bankruptcy again for 180 days after that case was dismissed.
First Steps after Filing:
The filing of the Chapter 7 bankruptcy essentially constitutes an order for relief and will bring about the automatic stay provided for in section 362 of the Bankruptcy Code.
Let me put that in layman’s terms. When you file a Chapter 7 bankruptcy petition, it automatically puts a “stay” or a “stop” to prevent further proceedings or acts against you or your property by anyone, except in the bankruptcy court, with respect to any claims arising before commencement of the case. The stay freezes your property so that it may be examined and administered in the bankruptcy court.
For an instance, if you are in the middle of a foreclosure action by your mortgage company, filing the bankruptcy proceeding puts a “STOP” on this process. OR if you are being sued or harassed by a creditor for non-payment, the bankruptcy petition again, puts a “STOP” on these acts against you and your property.
Within a few weeks of filing, the court will mail to all creditors, the debtor, and the debtor’s attorney a notice of the stay and the date and place for the section 341 meeting, also known as the first meeting of creditors. (Please see my previous blog about what goes on at the 341 meeting here)
This meeting is normally scheduled 20-40 days after filing the petition and must be at least 20 days after the notice. The notice will also contain deadlines for creditors who wish to file claims or complaints raising objections to discharge or to the dischargeablity of a particular debt.
After the Meeting of Creditors:
After the meeting of the creditors I usually tell my clients that we wait 60-70 days for a discharge and the close of the case unless a creditor objects. In most instances, if a creditor has not objected by the time we go to the 341 meeting, chances are they are not going to. Unless there is an objection, property claimed as exempt in the petition is retained by the debtor. The trustee will state at the 341 meeting that he will “abandoned all assets”, which simply means that you as the debtor, will be able to keep every asset listed on your petition.
If the debtor has more than minimal assets that are not exempted, they must be turned over to the trustee at or after the first meeting. The trustee will then collect any other property of the estate that is neither exempt nor abandoned, and liquidate the estate, (covert it to cash). The trustee usually gives 20 days notice of his/her intent to sell the property and nay party, including the debtor, may object to the proposed sale, which may be a private sale or a sale by public auction, within specified time limits.
The trustee will receive and evaluate all claims filed by creditors and object to them if they are improper. Once the status of the claims is determined and the deadline for filing claims is past, the distribution to creditors is made.
If we can help answer any questions you may have on a Chapter 7 Bankruptcy, please contact our office today for a FREE CONSULTATION.
Lam Law Firm, LLC •1335 44th Ave North • Suite 100 • Myrtle Beach, SC 29577
DISCLAIMER: The information contained on this page is for general information, only. It is not intended to be legal advice, nor should you make legal decisions based on this information. Please consult one of our attorneys to see how the law applies to your particular situation.