What Happens After You File a Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, also known as liquidation bankruptcy, allows a debtor to divest themselves of all unsecured debts. Such debts include personal loans, credit cards, and other types of debt that are not backed by collateral such as a mortgage or a car loan.
When considering debt release through Chapter 7 bankruptcy, you may wonder what will happen after the bankruptcy is filed. It’s important to note that bankruptcy protection protects debtors from unpayable debts. But it also protects the interests of creditors as well.
You will be assigned a bankruptcy trustee
Once your petition is complete and filed with the court, you will be assigned a bankruptcy trustee. The trustee represents the interests of the court and creditors and will review your application for bankruptcy. The trustee is designed to take control of your assets and your debts when you file for bankruptcy. After your filing, your assets will become part of the bankruptcy estate which is under the control of the bankruptcy trustee. In most cases, the trustee does not find significant assets to liquidate. But the debt is still discharged.
The automatic stay goes into effect
After you file your bankruptcy petition, the automatic stay goes into effect. Creditors must halt all adverse actions against you. This means that they cannot place a lien on your home, levy your bank account, or garnish your wages. Debt collectors must stop calling you. Any effort to collect the debt must cease. If the creditor has initiated legal action against you, they must suspend their efforts. Your mortgage lender cannot foreclose on your home and your personal vehicle cannot be repossessed while you are under the protection of bankruptcy.
A meeting with your creditors
You will be required to attend a meeting with your creditors where they can raise specific objections to your bankruptcy filing. Creditors only attend these meetings and object to your exemptions.
You may not want to discharge all of your debts. For example, you may be interested in continuing to pay on your mortgage or your car loan. In those cases, you may need to reaffirm the debt in order to ensure that you don’t lose your vehicle.
You must take a personal financial management course
After you have filed under Chapter 7, you will be required to take a personal financial management course ordered by the court. You are required to take two such courses. One occurs before the bankruptcy is filed, but this one occurs after.
You receive a bankruptcy discharge
All of your listed debts are discharged in Chapter 7 except for those which you have reaffirmed and those debts that are non-dischargeable such as student loans. At the end of Chapter 7, you will no longer owe money to your creditors except for secured debts you choose to retain and/or reaffirm, or non-dischargeable debts such as most IRS debts and student loans.
Talk to a Jacksonville Chapter 7 Bankruptcy Attorney Today
The Law Offices of Carol M. Galloway represent the interests of Jacksonville residents who are considering filing under Chapter 7 bankruptcy. Call our Jacksonville bankruptcy lawyers today to schedule an appointment and we can begin discussing your next moves immediately.