Chapter 7 Bankruptcy

Need Help with Filing Chapter 7 Bankruptcy? Consult Sam Calvert, Attorney at Law

Chapter 7 is often called a “straight” bankruptcy. A chapter 7 case begins with the filing of a petition with the bankruptcy court.  A husband and wife may file a joint petition or they may file individual petitions.  If only one spouse owes money, the other does not have to file bankruptcy.

To prepare the bankruptcy papers to file with the court, we need copies of all bills or a list of all creditors and the amounts and nature of their claims; the amount and source of the your income; a list of all of the property you own, and a detailed list of your monthly living expenses, such as mortgage or rent payments, utilities, food, clothing, medical expenses, transportation, insurance payments, car payments, etc. You should bring your last two years tax returns and the last six months paycheck stubs to the meeting. You should also bring your real estate descriptions from your abstract or deed. If you have been to see a consumer credit counseling agency, we can often use the paperwork they put together for large parts of the information we need.

The court filing fee is $299.00 as of April 10, 2006, which must be paid before we can file the case. Unfortunately, the US Trustee (which oversees bankruptcy) will not permit attorneys in a Chapter 7 to bill the client after the case is filed. (Unlike creditor’s attorneys, who can get paid in installments!) Therefore, we have to have you pay us upfront, or you have to have someone co-sign for you. Frankly, co-signing for someone else is usually a bad idea, so it is sort of hard to encourage someone else to sign for you.

There is no particular limit on the amount of debt you must have, nor maximum amount of debt you can have, before you file a bankruptcy. However, you can file a chapter 7 only once every eight years. A "meeting of creditors" is held about 30 days after the paperwork is filed. Depending on the county in which you live, the meeting will be in St. Cloud, Fergus Falls, Mankato, Duluth, Minneapolis, or St. Paul. The debtor (or debtors) must attend the meeting. The trustee will swear you in and ask questions regarding your financial situation and the contents of the paperwork you filed with the court. Creditors may attend the meeting, but almost never do. Sixty days after the meeting with the trustee, you receive a “discharge”. This discharge releases you from most debt. Exceptions include child support, alimony, many taxes, debts incurred by fraud, personal injury stemming from a DUI, and student loans. Discharged creditors’ claims are wiped out, and they cannot collect them after your discharge. You may keep your house, by continuing to make the payments; to keep your vehicle, the lender will usually demand a “reaffirmation”, which is an agreement to pay even though you filed bankruptcy.

There is a great deal more to bankruptcy than this, of course; and there are exceptions to most rules. That's why we offer a free first visit.