Once you have committed yourself to filing for bankruptcy, you must decide whether or not you can file for a Chapter 7. This can often be confusing or frustrating, especially since the process is detailed and the qualifications can sometimes be difficult to understand. However, this step does not need to be long or discouraging. The act of filing for a 7 isn’t so hard, either; all you need to do is follow some basic steps and remember that your attorney is there to help. Don’t be afraid to ask questions!
TAKING THE MEANS TEST
The Means Test is an exercise that will help you find out whether or not you qualify for a Chapter 7. You can find it online in several different places. Make sure to use the most recent version, as there have been infrequent changes in the past. The execution of the Means Test is relatively simple: you must first calculate the amount of income you will earn in a sixty-month period, then calculate all of your expenses for sixty months, and subtract the expenses from the income. Then, you must calculate your total amount of debt and subtract it from that number. There are several sections in each category and all of them are fairly important, so be sure to seek out the most correct information for each one. If you do the test on a Means Test Calculator and you fill out all of the information correctly, you will know immediately whether you have passed or failed the test; passing means that you are eligible for a 7, and failing usually means that you are not.
Gathering Information
Once you know that you are going to file a Chapter 7, you will be required to bring in some specific materials, including your budget, a list of all of your assets, a list of your creditors, and other things along that vein. Your attorney will give you a complete list of everything he or she needs to see. Make sure to bring in the most correct information you can. It is important to be perfectly honest during this stage, as omissions can get you into a lot of trouble with the court and ruin your chances of filing for bankruptcy. This means that even though Chapter 7 bankruptcy includes some asset liquidation, you must still include all of them on your list.
Finding Exemptions
Just because this type of bankruptcy includes asset liquidation, it doesn’t mean that you will lose anything. On the contrary; there are specific exemptions that will allow you to keep your vehicle, your home, your heirlooms, and other specific assets, provided they are not worth more than a specific amount. You can find a list of all of the exemptions online or you can speak to your attorney about which ones you qualify for. It is fairly easy to calculate which things you can keep and which things you must liquidate.
Meeting with Creditors
Although the act of filing initiates what the legal system calls an “automatic stay,” you must still meet with them during the course of your bankruptcy. Filing is a legal right you have as a citizen of the US, but you must discuss the details and terms of your bankruptcy with your creditors in order to properly finish the process. This is no more important in a 7 than it is in a 13; even if you switch to a Chapter 13, you will still be required to do this step.
Going to Court
Before your bankruptcy can truly be finished, you must appear in court with your attorney. Failure to appear in court can ruin your chances of getting your bankruptcy approved, so make sure to clear your schedule and keep the date in mind. Your attorney will let you know if you are required to bring anything special or extra. Once you have been approved by a judge in bankruptcy court, you can finish your bankruptcy, freeing yourself from the pressure and oppressive nature of unmanageable debt; if you keep these things in mind, you can make sure it goes as smoothly as possible.