Chapter 7 is often referred to as a "straight" or "liquidation" bankruptcy. The court appoints a trustee to oversee your case, and part of the trustee's job is to take ownership of your assets, sell them, then distribute to your creditors the money that's been raised. Creditors must submit proper claims to receive payment.
The process of a Chapter 7 case usually begins with the debtor filing a petition with the bankruptcy court. Once the petition is filed the automatic stay comes into effect. The automatic stay stops any legal action or collection process from going forward. The petition is comprised of schedules, statements and declarations. The schedules include a listing of assets and liabilities, creditor information, income and expenses, contracts and leases. Statements include statements of financial affairs and Declaration about the debtor’s intention, credit counseling compliance and social security number.
When filing a Chapter 7 Bankruptcy petition, the debtor must provide the following:
- Six months of pay stubs
- Two years of tax returns (federal and state)
- Bank account information
- Car and title information
- Mortgage title and information (if applicable)
- A list of all creditors (including recipient of alimony and child support payments if applicable)
- A copy of the credit counseling course certificate
Credit counseling services can be found at the US Deparement of Justice Credit Counseling and Debtor Education Information web page.Contact us