Chapter 7 Bankruptcy
What You Need to Know
Chapter 7 is the classic form of bankruptcy. It is sometimes called a liquidation case, but most chapter 7 cases do not involve loss of your property. If you tell our bankruptcy attorney about property that might be at risk in chapter 7, we will talk to you about it before we file your case. A better option may be to file chapter 13 instead, which normally protects property that would be risk in chapter 7. There are exemptions used to protect property and most exemptions are subject to dollar limits that are adjusted over time. No payments are made to the bankruptcy trustee. Most chapter 7 cases take about 3 months to complete. You normally do not have to go to court in chapter 7. The only public appearance is a creditor meeting. (See below.)
Steps of a Chapter 7 Bankruptcy
Free Initial Consultation
At the Law Office of Thomas Jeffrey, we have found that most potential clients call us only when it’s the last option. Many have taken loans against retirement accounts, borrowed from friends and family, and tried everything else they can think of before calling. They often tell us that deciding to call for the first time was the worst part of the process. Attorney Thomas Jeffrey is well aware of that when speaking and meeting with clients. He always does the initial consultation, which can be in person or by telephone, at no charge.
During the initial consultation, Attorney Thomas Jeffrey first tries to determine if the clients are good candidates for bankruptcy and if so, which chapter of bankruptcy. Mr. Jeffrey has told many potential clients that bankruptcy was not advisable or even necessary, usually without the clients ever having to retain his legal services. He has also talked to and represented clients concerning bankruptcy alternatives, including settlements, payment plans and other options. If bankruptcy will benefit the client, his approach is to explain exactly how and what the costs and consequences will be. Mr. Jeffrey does not try to persuade clients to file bankruptcy, which he believes is a very personal decision. Our Santa Rosa bankruptcy law firm has had many clients ask if they should file bankruptcy. Although in some cases there really are no other options, we have always told our clients that it was their decision to make.
Preparing to File
Most clients have to take a credit counseling class to be eligible to file chapter 7. This class normally is done on-line, by telephone, or some combination of the two and takes a total of an hour or two. Clients also complete a worksheet that we use to prepare drafts of the documents. Completing this worksheet thoroughly and accurately is critical to the success of the case. Once the worksheet is complete, Mr. Jeffrey will personally go over everything. He does not use assistants, paralegals or other attorneys for this. Mr. Jeffrey has had many cases over the years in which he has found things in the documents that alerted him to a possible issue that could be critical to the client. A thorough, conscientious assistant or paralegal can help, but there is no substitute for the knowledge of an experienced bankruptcy attorney in anticipating these issues.
Filing
Once all of the documents have been finalized and corrected, you will sign all documents and the case is then filed. Bankruptcy cases are filed electronically, but the documents signed by most clients are over ½ inch in thickness. The bankruptcy court then mails notice of the filing to you, the attorney, and all creditors. As soon as your case is filed, creditors generally cannot foreclose, repossess or take most other actions to collect debts.
Creditor Meeting
Approximately 30 days after the filing, a creditor meeting is held. Mr. Jeffrey tells his clients before the meeting what to expect, which depends on the chapter of the bankruptcy and the bankruptcy trustee assigned to the case. The meeting is not in court but most of clients get very stressed thinking more is going to happen than usually does. In well over 95 % of the cases no creditors show up and the only person asking our clients any questions is the bankruptcy trustee assigned to the case. Most meetings are very brief and involve little more than verifying that the information on the documents we filed was accurate. Our clients usually are amazed at how quickly it is over and how little they are asked. Each trustee requests certain documents before the creditor meeting. The requirements for each is listed on the Bankruptcy Forms page.
Financial Management Course
Most clients have to complete a second class in “Personal Financial Management” or “Debtor Education” after the case is filed. Just as with the first class, it normally is done on-line, by telephone, or some combination of the two and takes a total of an hour or two.
Discharge
If anyone is going to object to your discharge, they normally have to file that objection no later than approximately 60 days after your creditor meeting. Those types of objections are rare. Once the deadline passes without any objections, the court will automatically issue an order discharging all dischargeable debts. See “Debts That May Not Be Discharged”. That is the primary goal of the case and usually results in the end of the bankruptcy process.
Credit Reporting
At the Law Office of Thomas Jeffrey, we advise our clients to check their credit report 2 months or more after the discharge order to see if creditors are properly reporting the accounts. Mr. Jeffrey has seen a lot of cases in which creditors have not properly reported accounts after bankruptcy and in some cases it's done intentionally. There are companies that specialize in buying debt that has been discharged in bankruptcy. These companies illegally report the account to the credit bureaus in an attempt to get the account paid. Mr. Jeffrey has had to file suit against creditors after bankruptcy for refusing to correctly report accounts after bankruptcy. If that happens, you are entitled to attorneys fees and damages.
Contact an Experienced Sonoma County Chapter 7 Bankruptcy Attorney
To learn more about the specifics of your situation from an experienced chapter 7 bankruptcy attorney, contact the Law Offices of Thomas Jeffrey for a FREE consultation at (707) 543-8530 or fill out our online form. We serve clients throughout Sonoma County, California, including Santa Rosa, Petaluma, Windsor, Rohnert Park, and all other surrounding communities.
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