Bankcruptcies

Chapter 7 Bankruptcy Eliminates Debt
In the most basic sense, a chapter 7 bankruptcy discharges debt in exchange for surrendering non-exempt assets. Secured debts may be voluntarily "reaffirmed" to retain collateral, which allows debtors to continue paying according to original or negotiated terms. From the date of filing, chapter 7 bankruptcy usually lasts four to six months. However, should either a trustee or creditor contest discharge, the court may require greater time or deny discharge altogether.

Petition for relief in Chapter 7 Bankruptcy
A chapter 7 bankruptcy begins with the filing of a petition with related documents. Upon filing, a Chapter 7 automatic stay prevents most creditors from continuing further actions to collect debts. The ban on further collection efforts normally includes lawsuits in state and federal courts, and non-judicial collection efforts including real estate foreclosures.

Meeting of the creditors in Chapter 7 Bankruptcy
While chapter 7 bankruptcy is pending, the U.S. Trustee (normally through a local assistant U.S. Trustee) retains legal authority to administer the debtor's estate. Trustees conduct formal meetings with debtors and require recorded testimony. Creditors are also invited to attend trustee meetings (hence the name "Meeting of the Creditors" in 11 USC Sec. 341) and allow creditors to ask debtors questions. A trustee's authority extends over all assets and debts, and ultimately the trustee recommends a course of action for the court. While a chapter 7 bankruptcy is pending, trustees retain authority.

Discharge through Chapter 7 Bankruptcy
Be aware only "dischargeable" debts are eliminated. Reaffirmed debts also survive discharge, however only upon the specific terms of separate reaffirmation agreements signed voluntarily by the debtor with court approval. Also be aware that filing chapter 7 bankruptcy becomes more difficult each year under the current political environment.