Chapter 7 Bankruptcy Forms Bankruptcy – Chapter 7 What you need to know if by kxk65171

VIEWS: 65 PAGES: 23

More Info
									    Bankruptcy –
     Chapter 7

What you need to know if you are
 thinking of filing a Chapter 7
         Bankruptcy.
Overview (continued on next page)

    Bankruptcy may make it possible for you to:

   Eliminate the legal obligation to pay most or all of your
    debts. This is called a "discharge" of debts. It is designed
    to give you a fresh financial start. (see Tennessee
    bankruptcy exemptions)
   Stop foreclosure on your house or mobile home and
    allow you an opportunity to catch up on missed
    payments. (Bankruptcy does not, however, automatically
    eliminate mortgages and other liens on your property
    without payment.)
   Prevent repossession of a car or other property, or force
    the creditor to return property even after it has been
    repossessed.
Overview (continued)
   Stop wage garnishment, debt collection harassment, and
    similar creditor actions to collect a debt.
   Restore or prevent termination of utility service.
   Allow you to challenge the claims of creditors who have
    committed fraud or who are otherwise trying to collect
    more than you really owe
Topics We Will Cover
   What is a Chapter 7 Bankruptcy?
   The Process of Filing Chapter 7
   Are there any debts I can’t discharge?
   Tennessee Bankruptcy Exemptions
   What property, if any, can I keep?
   Reaffirmation
   Resources
What is a Chapter 7 Bankruptcy?


In a Chapter 7 bankruptcy you wipe out your debts
and get a "Fresh Start". Chapter 7 bankruptcy is a
liquidation where the trustee collects all of your assets
and sells any assets which are not exempt. (see
Tennessee Exemptions) The trustee sells the assets
and pays you, the debtor, any amount exempted. The
net proceeds of the liquidation are then distributed to
your creditors with a commission taken by the trustee
overseeing the distribution.
  The Process of Filing Chapter 7
  Gathering Paperwork

To begin the bankruptcy process you must itemize your
 current income sources; major financial transactions for
 the last two years; monthly living expenses; debts (secured
 and unsecured); and property (all assets and possessions,
 not just real estate). You should also collect your tax
 returns for the last two years, deeds to any real estate you
 own, your car(s) titles, and the documents for any loans
 you may have.
The Process of Filing Chapter 7
Filing the Petition

  Once you have gathered this information, either on
  your own or with the help of an attorney, you should
  then determine which property you believe is exempt
  from seizure based on the Tennessee exemptions. To
  actually file, either your or your attorney, will need
  to file a two-page petition and several other forms at
  your Tennessee district bankruptcy court.
   The Process of Filing Chapter 7
   Filing the Petition

These forms, collectively are referred to as the schedules
 and ask you to describe your current financial status and
 recent financial transactions (typically within the last two
 years). If your creditors or the judge feel or find out that
 you have not been entirely forthcoming in your
 bankruptcy filing, it could jeopardize the outcome of your
 petition.

The cost for filing a Chapter 7 bankruptcy is $200. This fee
 may not be waived but you may be able to pay it in
 installments. The fee of $185 for a Chapter 13 bankruptcy
 can not be waived.
The Process of Filing Chapter 7
The Automatic Stay
 Once you have filed your   This will stop any
 paperwork with the         foreclosure proceedings. If
 bankruptcy court, an       you have filed Chapter 13,
 automatic stay             you must begin making
 immediately goes into      your plan payments.
 effect. This provision     Generally these payments
 prevents creditors from    will be withdrawn directly
 making direct contact      from your wages and you
 with you or staking a      or your attorney should
 claim on any of your       arrange for these
 property from the day of   payments to be deducted
 filing forward.            from your wages
The Process of Filing Chapter 7
The Bankruptcy Trustee


 Upon filing, the court will assume legal control of your
 debts and property not covered by your Tennessee
 exemptions. A trustee will be appointed to your case by the
 court. The job of the trustee is to see that your creditors
 are paid as much as possible. This person will thoroughly
 review your paperwork, particularly the assets you have in
 your possession and the exemptions you wish to claim, and
 can challenge any element of your case.
 The Process of Filing Chapter 7
 The Meeting of Creditors

Approximately a month after filing, the trustee will call a
first meeting of creditors, which the debtor must attend.
This proceeding is also referred to as the § 341 meeting,
named after the corresponding section of the bankruptcy
code. Creditors rarely attend a Chapter 7 bankruptcy
meeting; one or two creditors may attend a Chapter 13
meeting, especially if there is a question as to the legitimacy
of some aspect of the plan. Objections are typically resolved
by negotiation between the debtor or the debtor's counsel
and the creditor. If a compromise can not be reached, a
judge will intervene.
The Process of Filing Chapter 7
The Meeting of Creditors


  The meeting of creditors typically lasts about five
  minutes. You will receive notice of the location of the
  meeting but you may contact the court to confirm the
  address and time. (see Tennessee Bankruptcy Court
  Directory)

  Most Chapter 7 filings involve no non-exempt assets,
  however, if you filed for Chapter 7 and do have non-
  exempt assets, you will have to turn over non-exempt
  property (or its fair market value in cash) to the
  trustee after the meeting.

Continued on next page…
The Process of Filing Chapter 7
The Meeting of Creditors (continued)
 The trustee will sell this property and distribute the
  proceeds to your creditors. If the property isn't worth a
  great deal or would be hard to sell, the trustee may decide
  to abandon the property (and return it to you). Trustees
  and creditors have 60 days to challenge the debtor's right
  to a discharge. If there are no challenges, you will receive
  a notice from the court that your dischargeable debts have
  been discharged within roughly three to six months.
 The Process of Filing Chapter 7
 The Meeting of Creditors

Most Chapter 7 filings involve no non-exempt assets, however, if
you filed for Chapter 7 and do have non-exempt assets, you will
have to turn over non-exempt property (or its fair market value
in cash) to the trustee after the meeting.

The trustee will sell this property and distribute the proceeds to
your creditors. If the property isn't worth a great deal or would
be hard to sell, the trustee may decide to abandon the property
(and return it to you). Trustees and creditors have 60 days to
challenge the debtor's right to a discharge. If there are no
challenges, you will receive a notice from the court that your
dischargeable debts have been discharged within roughly three
to six months.
Are there any debts I can’t discharge?



 Certain debts cannot be discharged in a Chapter 7
 bankruptcy, such as alimony, child support, fraudulent
 debts, certain taxes, student loans, and certain items
 charged.
 Usually, large credit card debt and other unsecured bills
 coupled with few assets typify a Chapter 7 bankruptcy
 filer. In the vast majority of cases this type of bankruptcy
 is able to completely eliminate all of the filers debts.
What property, if any, can I keep?


You may keep certain secured debts such as your car
or your furniture or house by reaffirming those debts.
To do so, you must sign a voluntary "Reaffirmation
Agreement". However, you cannot wipe out that debt
(or discharge the debt) for another six years. In other
words, if you decide that you want to keep your house
or your car or your furniture, and you reaffirm the
debt, you cannot bankrupt (or wipe-out) that debt
again for six years. You will still owe that debt and
you must continue to pay it just as you were to
continue to pay it before you filed the bankruptcy.
Tennessee Bankruptcy Exemptions



The Tennessee bankruptcy exemptions chart, details the
property you can exempt or protect from creditors. You
may exempt any property that falls into one of the
exemptions categories below, up to the dollar amount listed.
You will be able to kept this exempted property after you
file bankruptcy. Please note that there are certain debts
which you will not be able to erase in bankruptcy.
Tennessee Bankruptcy Exemptions



   An exemption limit applies to any equity you have
   in the property. Equity is the difference between
   the value of the property and what is owed on the
   property. For example, a car valued at $5000 with
   a loan of $4500 has an equity value of only $500.




 continued on next page…
Tennessee Bankruptcy Exemptions


 If the property is secured by a loan, such as a car or home,
 and you are current on the payments, the equity is covered
 by your exemptions, and you elect to keep making
 payments on the loan you generally can keep this property
 through the bankruptcy. If all the equity is not covered by
 your exemptions the trustee may elect to liquidate this
 asset and distribute the assets. Generally, in this case, you
 would be entitled to the value of your exemption in the
 asset as a cash payment.

 continued on next page…
Tennessee Bankruptcy Exemptions
 Bankruptcy law allows married couples filing jointly to
 each claim a full set of exemptions, unless otherwise noted.
 To keep non-exempt property, a debtor must generally
 pay the trustee the value of the non-exempt property.
 You also may use certain federal exemptions in addition to
 your Tennessee exemptions.
  More About Reaffirmation


In order to reaffirm the debt, you must also bring it
 current. In other words, if you are three or four months
 behind, then you must pay the back payments which are
 due in order to reaffirm it. You can selectively reaffirm
 your debts - you can state that you wish to keep the house
 and the furniture, but that you want the car and the
 jewelry to go back to the respective Creditors.

Reaffirmation agreements can be set aside during the
earlier of 60 days after the agreement is filed with the
Court, or upon the Court's issuance of an Order of
Discharge.
How Will A Chapter 7 Affect My Credit?

There is no clear answer to this question. Unfortunately, if
 you are behind on your bills, your credit may already be
 bad. Bankruptcy will probably not make things any worse.
 The fact that you've filed a bankruptcy can appear on your
 credit record for ten years. But since bankruptcy wipes out
 your old debts, you are likely to be in a better position to
 pay your current bills, and you may be able to get new
 credit.
Resources
   Tennessee Bankruptcy Law
   Tennessee Bankruptcy Law Frequently Asked Questions
   Tennessee Bankruptcy Exemption Chart
   United States Bankruptcy Court for the Middle District of
    Tennessee

								
To top