When a person is considering filing bankruptcy, there are many things that will go through their heads. First and foremost, because even considering filing chapter 7 bankruptcy with a bankruptcy law firm in McKinney, you will want to make sure that you are not in a desperate situation that could put you in an even worse situation. Hence, the first thing you need to do is figure out the way to handle your vital expenses each month. Maybe you have been paying on credit cards, or maybe you had been paying on an additional, unnecessary vehicle and have finally realized that you cannot keep going like this and still be able to put food on the table for your family. Hence, you will need to whittle down your expenses to those ones that are necessary.
Consider the following examples of unnecessary expenses as compared to necessary expenses.
- Expensive car payments on new or nearly new vehicles as opposed to buying a reliable cash car for $4-6k. You could find yourself paying car payments of $5-600/month which, if you were to omit paying these car payments, you could afford a cash car in as little as just several months.
- Premium cable package when you could go with the bare-bones package or consider going with a low cost alternative like basic internet and Netflix or Hulu
- Expensive consumer goods like TVs, other electronics, boats, timeshares or more. On the other hand, you could consider the important of basic transportation costs or cheap dates with a spouse in order to strengthen the relationship without buying lavish consumer goods and electronics.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is known as liquidation bankruptcy and can be used to get a fresh start through elimination of past debts. If you have serious past debts like old credit card balances, past unpaid utilities or cell phone bills, past broken leases, past repossession balances, or old medical bills, then bankruptcy could help you get a fresh start.
Through the protection of the bankruptcy court’s automatic stay, the old creditors or new debt buyers are forced to cease in their collection activities or lawsuits and you are provided with protection from these past debts. One of the benefits of filing chapter 7 bankruptcy with our law firm is that we help our clients to rebuild their clients after bankruptcy.
Aside from being called a fresh start bankruptcy, chapter 7 bankruptcy is also known as a liquidation bankruptcy. This is a term used to describe the fact that in a chapter 7 bankruptcy, your assets are sold to pay portions or all of the debts owed to creditors. But the name is not entirely accurate because the majority of clients considering bankruptcy find that most of their assets fall into protected classes such that they are exempt from being sold by the trustee to pay old debts. This is the case with most of our clients and unless you have significant assets like a second home, boats, exotic cars or other assets like these, you will be fine and will not likely have to worry about any of your assets being liquidated.
The occasional exception to the fact that most clients will not have to have any of their assets liquidated will happen when a client receives an unexpected inheritance or were on title to a home that they did not consider to research further. Sometimes in the past, we have had clients who have come to us in a difficult situation but who had assets which were nonexempt. We have no choice but to turn them off of bankruptcy, at least in the short term because bankruptcy would essentially wipe out their nonexempt assets.
What is the Process for Filing Chapter 7 Bankruptcy
- Contact a bankruptcy attorney to review your situation and determine whether bankruptcy is an option that would be appropriate for your situation. If you and the attorney and any other capable and trusted advisers agree that bankruptcy would make sense for your situation, then you can plan to proceed.
- Provide additional information to your bankruptcy attorney which will be required by the court in order to file the petition and properly and correctly prepare your bankruptcy petition. Some of the documents which are required for filing include the following: six full calendar months’ pay stubs from employment, two years’ tax returns, your social s ecurity card, driver’s license or other form of government issue ID.
- Provide this information to your qualified bankruptcy attorney that can then take this and use it to prepare your petition. Then, you will possibly need to consider who needs to obtain proof of the bankruptcy filing. Some examples of creditors who would need to be updated about the details of the filing would include some of the following: mortgage company law firms if you have been facing foreclosure, auto lenders if you face repossession, plaintiffs in lawsuits revolving around credit card debt, repossession deficiencies, or broken lease balances, or others.
- Next, the bankruptcy petition is filed and you consider on the timing for this with your attorney. Some bankruptcy cases must be filed rather quickly due to necessity and some bankruptcy filings are not required to be filed as an emergency necessarily.
- Once your bankruptcy is filed, you will prepare for your 341 hearing which is generally quite an easy thing to handle. Your qualified bankruptcy law firm in McKinney will be right there beside you at the hearing. There are no majorly difficult questions, generally no trick questions, and you will be surprised at how easy this bankruptcy hearing will be for you. In stark comparison, the chapter 13 bankruptcy trustee hearing can sometimes become an all day ordeal; but the bankruptcy attorney will also be there with you if you need to file Ch. 13.
- Once your chapter 7 bankruptcy has been filed, and you’ve been to your hearing, then your bankruptcy is not completely done, but for many intensive purposes, the bankruptcy is done at that point, because it is just 60 days wherein you must wait for the bankruptcy to be officially completed in the absence of any creditor objections. The purpose of this 60 days is to allow creditors the right to object, but they will likely not object unless they know about your yacht in Boca Raton, or if they know about your second home in the ritzy nearby neighborhood.
- Then comes the discharge date of your bankruptcy and you find that you are relieved and surprised that this day could come so quickly. Consider on your past and you will remember that you have had a very difficult time prior to the bankruptcy filing and you will ask yourself, considering how not massively horrible this actual bankruptcy experience has been that you will ask yourself why you didn’t move forward with this sooner.
- Then, after your bankruptcy is completed, this is where you move on with your life, go back to being the normal, on-time bill paying self, or you go on to learn how to pay your bills on time if you hadn’t previously. Additionally, you will consider on your options and your bright future. If you ware with a normal, standard bankruptcy law firm, then you can feel satisfied and relieved in this situation. But if you are with an exceptional bankruptcy attorney then you can expect more. In the case of hiring Richard Weaver’s office to handle your bankruptcy, then you can expect that they will desire to assist you in rebuilding your credit.
And there you have the basics of a chapter 7 bankruptcy process.