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In a Chapter 7 bankruptcy, almost all of your debts are discharged. The debts that are not discharged are priority taxes, domestic support obligations, anything that has been deemed non-dischargeable in a previous bankruptcy, fraud-related items, and injuries due to driving under the influence, as well as certain fines, penalties, and restitutions.
You have to be a person to file Chapter 7 but you do not necessarily have to be a natural person; a corporation can file a Chapter 7. You have to pass the means test, if you are a human being. If you make too much money, then you have to file a Chapter 13 or a Chapter 11 because you can afford to repay some of your debts. You must take a credit counseling class to be eligible to file bankruptcy as well.
At the meeting of creditors, there are typically 10 cases called per hour by the trustee. The cases are assigned randomly. One of the first things that happen is that the trustee asks if there is anyone who wishes to elect a Chapter 7 trustee other than themselves. You have the right, as a creditor, to elect a different Chapter 7 trustee.
The Chapter 7 trustee calls up the debtors and asks a series of questions designed to confirm whether or not the debtor has any assets that are undisclosed. The trustee asks the debtor questions about the assets, looking to see if there is some value or if there has been a fraudulent transfer for some other item of value that the trustee can recover for the bankruptcy case. After the trustee finishes this questioning, it is open for any creditors who are present to question the debtor strictly about their finances. If there are none present, then the meeting is concluded.
A Chapter 7 trustee is charged with liquidating the bankruptcy estate. If there are any items that are not exempt or a portion that is not exempt, the trustee marshals those assets, sells whatever needs to be sold, and turns it into cash. The trustee sends out a notice to creditors to file claims. Once those claims come in, they are analyzed to make sure that they are somewhat reputable claims. Once that is done, the trustee may have to file a tax return for the estate and might have to file a lawsuit on behalf of the estate. Once all of the money is in and the trustee has done their job, they generate a final report which goes out to all of the people filing claims. The court makes a determination whether or not that is approved. If it is approved, the trustee writes all of the checks and sends them out and the case can be closed.
If you are not eligible for a Chapter 7 bankruptcy, you can file a Chapter 13 or you can file a Chapter 11. You may not be eligible because you have filed a different case too recently.
If it is a no-asset case, a Chapter 7 typically takes 120 days. If the Chapter 7 case is an asset case, it will remain open much longer. Typically, barring any lawsuits for discharge-ability, that individual will still get their discharge within that 120-day period, but the bankruptcy case will remain open until the Chapter 7 trustee has finished administering the case.
For more information on Chapter 7 Bankruptcy, an initial consultation with an experienced California Chapter 7 Bankruptcy Attorney is your next best step. Get the information and legal answers you are seeking by calling (916) 685-7878 today.
Mr. Cianchetta is an OUTSTANDING attorney. I was a little nervous about seeing an attorney for my case. Mr. Cianchetta and his staff made my wife and I feel right at ease. He took extra time explaining what to expect before, during and after our process. His advice was right on!
- Jack M.
