Chapter 7 Bankruptcy

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What is the role of the attorney for the person filing a Chapter 7 case?

The attorney for the person filing performs the following functions in a typical Chapter 7 consumer case:   (1) Analyze the amount and nature of the debts owed by the person filing and determine the best remedy for the person’s financial problems.   (2) Advise the person filing of the relief available under Chapter 7 and the other Chapters of the Bankruptcy Code, and of the advisability of proceeding under each Chapter.   (3) Assist the person in obtaining the required pre-filing credit counseling class.   (4) Assemble the information and data necessary to prepare the Chapter 7 forms for filing.   (5) Prepare the petitions, schedules, statements and other Chapter 7 forms for filing with the bankruptcy court.   (6) Assist the person filing in arranging his or her assets so as to enable the person to retain as many of the assets as possible after the Chapter 7 case.   (7) Filing the Chapter 7 petitions, schedules, statements and other forms with the bankruptcy court, and, if necessary, notifying certain creditors of the commencement of the case.   (8) If necessary, assisting the person filing in reaffirming certain debts, redeeming personal property, setting aside mortgages or liens against exempt property, and otherwise carrying out the matters set forth in the statement of intention.   (9) Attending the meeting of creditors with the person and appearing with the person at any other hearings that may be held in the case.   (10)  Assist the debtor in attending and completing the required instructional course on personal financial management.   (11)  If necessary, preparing and filing amended schedules, statements, and other documents with the bankruptcy court in order to protect the rights of the person.   [...]

How does a Chapter 7 discharge affect the liability of cosigners and other parties who may be liable to a creditor on a discharged debt?

A Chapter 7 discharge releases only the people who filed the Chapter 7 case.  The liability of any other party on a debt is not affected by a Chapter 7 discharge.  Therefore, a person who has cosigned or guaranteed a debt for the person filing is still liable for the debt even if the person filing receives a Chapter 7 discharge with respect to the debt.

How long does a Chapter 7 case last?

A successful Chapter 7 case begins with the filing of the bankruptcy forms and ends with the closing of the case by the court.  If there are no nonexempt assets for the trustee to collect, the case will most likely be closed shortly after the person filing receives his or her discharge, which is usually about four months after the case is filed.  If there are nonexempt assets for the trustee to collect, the length of the case will depend on how long it takes the trustee to collect the assets and perform his or her other duties in the case.  Most Chapter 7 consumer cases with assets last about six months, but some last considerably longer.

May a utility company refuse to provide service to a person if the company’s utility bill is discharged under Chapter 7?

After a Chapter 7 case is filed, the person filing should provide a utility company with a deposit to ensure the payment of future utility services.  It is illegal for a utility company to refuse to provide utility service to the person after the case is filed, or to otherwise discriminate against the person, if its bill for past utility services is discharged in the  person’s Chapter 7 case.

What if a person has no nonexempt property for the trustee to collect?

If, from the bankruptcy forms filed, it appears that the person filing has no nonexempt property, a notice will be sent to the creditors advising them that there appears to be no assets from which to pay creditors, that it is unnecessary for them to file claims, and that if assets are later discovered they will then be given an opportunity to file claims.  This type of case is referred to as a no-asset case.  Most Chapter 7 cases that are filed by consumers are no-asset cases.  Determining if your case would be a no-asset case is part of the valuable services rendered by the Bolger Law Firm.

What is a trustee in a Chapter 7 case, and what does he or she do?

The trustee is a person appointed by the United States Trustee's Office to examine the person who filed the case, collect the person’s nonexempt property, if any exists, and pay the expenses of the estate and the claims of creditors.  In addition, the trustee has certain administrative duties in a Chapter 7 case and is responsible for seeing to it that the person filing performs the required duties in the case.  A trustee is appointed in a Chapter 7 case, even if the person filing has no nonexempt property.

When must a person appear in court in a Chapter 7 case and what happens there?

Usually the one and only time a person attends a hearing is at the so-called “Meeting of Creditors,” at which most creditors decline to attend.  Attorney Richard Bolger appears at the hearing with you.  He has been to thousands of such hearings.  The court personnel, US Trustee's Office and panel trustees have worked with Mr. Bolger for many years in conducting these hearings.  The person filing the case must bring photo identification, his or her social security card (or an acceptable substitute).  At this hearing the person is put under oath and questioned about his or her debts, assets, income and expenses by the panel trustee.  In most Chapter 7 cases, no creditors appear in court; but any creditor that does appear is usually allowed to question the person.  For most persons this will be the only court appearance.

What is exempt property?

Exempt property is property that is protected by law from the claims of creditors.  However, if exempt property has been pledged to secure a debt or is otherwise encumbered by a valid lien or mortgage, the lien or mortgage holder may claim the exempt property by foreclosing upon or otherwise enforcing the creditor’s lien or mortgage.  In bankruptcy cases property may be exempt under either state or federal law.  Exempt property typically includes all or a portion of a person’s unpaid wages, home equity, household furniture, and personal effects.  Determining what property of yours is exempt is another key part of the services rendered by Attorney Richard Bolger. Schedule an appointment to see how you would be affected by the filing of a bankruptcy petition.

May employers or governmental agencies discriminate against persons who file Chapter 7 cases?

No.  It is illegal for either private or governmental employers to discriminate against a person as to employment because that person has filed a Chapter 7 case.  It is also illegal for local, state, or federal governmental agencies to discriminate against a person as to the granting of licenses (including a driver’s license), permits, student loans, and similar grants because that person has filed a Chapter 7 case.