If you have decided that bankruptcy is your best option for debt relief – and that a Chapter 7 “fresh start” approach instead of a Chapter 13 payment plan is best for you (and further assuming that you qualify to use Chapter 7 bankruptcy), then your next inquiry will be how the Chapter 7 process works.
To begin, you will need to file a petition for bankruptcy with the appropriate bankruptcy court, which if you are an individual will usually be the location closest to where you live in Kentucky. At this point you will also need to file with the court some additional paperwork concerning matters such as your financial situation, how much money you make, and what your expenses are.
Your bankruptcy attorney will know the kinds of the documents that you will need to file. As a general matter, you will need to have the following:
- a list of your creditors, and their types of claims;
- how much income you make, what its source is, and how often you are paid;
- a list of all of your real and personal property; and
- a list of your monthly living expenses.
Depending on how much money you make, you may need to pay filing fees, or the fee may be waived by the court if your income is low enough.
Once your bankruptcy attorney has filed your petition, the “automatic stay” will become effective against most kinds of creditors, and they will need to stop contacting you and threatening to take legal action against you to collect debts.
The next step in a Chapter 7 bankruptcy will be a meeting of your creditors, which ordinarily happens about 20 to 40 days after the petition filing. In this meeting you, your bankruptcy attorney, the bankruptcy trustee and your creditors will gather so that the trustee and creditors can ask you questions about your financial matters and your property. Aside from determining the validity of your petition, the trustee will also see to it that you are aware of the consequences to you of filing for bankruptcy.
If everything goes well during the filing and the meeting of creditors, your next step will be the actual discharge of eligible debts, which follows 60 to 90 days after the meeting.