Filing - Chapter 7 Bankruptcy

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Chapter 7 bankruptcy law does not place any limit on the amount of debt that is required to make an individual eligible to file a pe tition in the bankruptcy court. Anyone can file chapter 7 bankruptcy--individuals, married couples or businessmen, sole proprietors or partners.

 Cost of Filing Bankruptcy

To file for bankruptcy, you will first have to fill out an application form duly signed by you and your attorney. The court charges a petition filing fee and also administrative costs, which roughly total up to $200. The fee of the lawyers usually varies from $800 to $1,200. Some lawyers also charge consultation fees. You can save on your lawyer's fees in some situations; for example, when you meet your creditors you don't have to take your lawyer along.

When you file your petition, you also have to provide a list of your creditors, a schedule of your assets and liabilities, and also the details of your income and expenditure. The petition should also mention the list of all your assets under 11 U.S.C. 521. You should also enumerate the items which you intend to exempt from being sold or disposed of in any other way. For this, you will also have to give relevant reasons. Necessary property, such as a house and car, is exempted from being sold. Once your petition is filed, an automatic stay is granted, which stops your creditors from taking steps on your assets or calling you persistently for refunds.

The court issues a notice of your bankruptcy to your creditors and appoints a trustee, who is usually a lawyer with experience in bankruptcy cases. The trustee then convenes a meeting between you and the creditors. It is mandatory for you to attend the meeting even if the creditors decide not to turn up. The trustee and the creditors may seek further clarification regarding your assets and your ability to pay back your loans. You can also ask your attorney to be present during the meeting if you are not confident about facing the trustee and the creditors on your own.

Creditors, too, are required to file proofs of their claims within a specified period and the debtor and the trustee can object to the claims.

Chapter 7 Bankruptcy

FORMS-Chapter 7 Bankruptcy