The steps below are the basic steps for filing for Chapter 7 bankruptcy relief. Since everyone’s circumstances are different, however, please review the process with your attorney prior to any filings.
Income Qualifies for Chapter 7 – Next Steps
1. Debtor Education: There are two classes that must be completed before getting a discharge. The first class, Credit Counseling, must be completed before any papers can be filed with the court. The classes must be taken with a court approved agency, and that agency will issue a certificate after the course has been completed. This certificate will be included in the paperwork filed at the start of the bankruptcy process. The certificate is valid for 180 days after taking the Credit Counseling class. Massachusetts Approved Credit Counseling Agencies
The second class, Financial Management, must be completed before the court will order the debts discharged. This class must be completed within 45 days after the Meeting of Creditors. The cost is generally about $50.00 for each class, and can be done on the telephone or over the internet. Massachusetts Approved Financial Management Agencies Most court approved agencies offer both classes.
2. Filling out the Bankruptcy Petition: The bankruptcy petition is somewhat like a tax return. It has summary pages, followed by more detailed supporting information. On these forms will be listed income, debts, and assets. The asset section of the petition is where all assets will be listed and also where they will be protected. This protection is done by using the exemption amount allowed by selecting either the state or federal exemption amounts. Simply stated, although an asset may be listed, it may also be that you are allowed to keep everything that had to be listed. Some states, Massachusetts is one of them, allow a choice between using the federal exemptions or the state exemptions to keep your assets. That decision should be discussed with your attorney.
3. The Meeting of Creditors: after the papers have been filed with the court, a meeting will be set up by the bankruptcy trustee assigned to the case. This meeting is also known as a “341 Meeting.” Creditors are notified of this meeting, and have the option to attend and ask questions. In reality, rarely do creditors attend these meetings. The bankruptcy trustee runs the meeting and will ask the debtor a series of questions about the papers filed with the court. The bankruptcy trustee’s job is to determine if all assets have been included on the initial filing and whether there are any new assets that may not be protected. The meeting generally lasts for about ten minutes.
4. Getting to Discharge: Within 45 days after the Meeting of Creditors, if not already filed, a certificate showing that the second required Debtor Education class has been completed must be filed. Once that has been done, and unless there is an objection filed by a creditor, the court will issue a discharge within 60 days of the date of the Meeting of Creditors. This is usually the end of the process, and the case is closed.