Chapter 7 Bankruptcy
Chapter 7 Bankruptcy
Commonly referred to as “liquidation,” Chapter 7 bankruptcy is available to people whose income does not meet certain thresholds. In this type of bankruptcy, the debtor’s non-exempt assets are liquidated into cash and a trustee distributes that money to creditors. Usually, there are few non-exempt assets.
How Does Chapter 7 Bankruptcy Work?
When your Chapter 7 bankruptcy case is filed, a trustee is appointed by the court. This trustee – who may or may not be a lawyer – is responsible for reviewing your bankruptcy papers to be sure that you have not hidden anything, did not lie, and made all required disclosures.
You will be called for a meeting of creditors within 4-6 weeks of when the case is filed. This is a very informal meeting with the trustee and takes about 10-15 minutes. You will be asked a series of questions about your case, and the trustee will review the documents that have been filed with the bankruptcy court.
Don’t worry about the meeting of creditors. Why? Because:
1. Creditors seldom – if ever – show up; and
2. One of our lawyers will be there with you to help you understand the process and to represent you during the meeting.
Once your meeting of creditors is completed, you will be required to complete a brief financial management certification course. Most people do this over the phone or online, and it helps you think about how to avoid financial problems in the future. Your Discharge of Debtor is issued about 4 months after the case is filed, and releases you from all of your dischargeable debts. Think about it – four months from now, you could be debt-free.
How Long Does It Take?
Arkansas Chapter 7 bankruptcy cases can be completely finished in approximately four months – sometimes even faster than that.
Of course, in order for the bankruptcy case to be completed quickly, it is important that you do the work needed to get the proper documents to our office. Those documents help us prepare a correct petition immediately, speeding up the process. If there are mistakes or inconsistencies, the Chapter 7 bankruptcy trustee may keep the case open to verify information or look into any issues.
In some difficult cases, if issues arise or there are assets in the case, there is no set answer to when a case will be closed. The bankruptcy trustee may take months or years to review additional documents and conduct an examination of assets. That may or may not interfere with your ability to get a Discharge in Bankruptcy. However, most cases are considered no-asset cases where the trustee does not administer any of your property.
If a case seems to be taking a long time to finish, call our office to talk with one of our staff members. If you have any questions along the way, give us a call so we can ensure you understand what is going on with your case.
Will I Lose My Property?
If our analysis of your situation shows that you would lose property in Chapter 7, we will let you know before your case is filed. You may decide that it’s worth it to give up something in exchange for a discharge of your debts. If not, however, there are other options, such as Chapter 13 bankruptcy, to help you.
What To Bring?
Filing for bankruptcy in Arkansas can be simple in the right hands. That’s why when you meet with Mr. Crawley at Crawley Law Firm, you are asked to bring certain documents and information for us. With the right information, we can get to the heart of your problem quickly and effectively, giving you the help, you need. When you come for your consultation, you will need to bring several documents.
- Driver’s license
- Social security card
- Paystubs – Last 6 months
- Bank Statements – Current month and past two months
- Tax Returns – 2017, 2018, 2019, 2020
- State Tax Returns – 2017, 2018, 2019 & 2020
- 2020 W2
- Personal Property Assessment – Most recent
- Vehicle registration – Only for ones you owe money on
- Proof of vehicle insurance
We will pull a credit report, but we will need a list of creditors for any not on there (name of creditor, address and amount owed)
If we need any further information, we will let you know.
Chapter 7 And Your Credit Score
Chapter 7 bankruptcy can take a huge toll on your credit rating, but luckily by the time your debts are discharged, you’re in a better financial position than before. You’ve hopefully also gained the budgeting and planning skills to make a recovery possible. The basic steps for rebuilding credit are simple; they just require some patience and discipline. The following are some options for acquiring loans and strategies for making the most of them.
Recording Credit Builder Loans
Reporting Secured Loans and Credit Cards
Rebuilding With Unsecured Loans and Cards
Rebuilding With Payment Strategies
Set A Free Consultation
Crawley Law Firm can assist you and answer any questions you may have about filing Chapter 7 Bankruptcy. Reach out to set up a free consultation with a bankruptcy attorney.