In most cases, the course takes a few hours online or by phone. Find out more about the forms you'll need to file for bankruptcy. The automatic stay will stop creditors. Once you file your bankruptcy petition, an order—called the automatic stay —is put into place if it's your first bankruptcy filing the stay isn't always available for subsequent bankruptcies. The automatic stay prohibits almost all of your creditors from continuing collection actions.
Creditors cannot call you, collect money from you, foreclose on your home, repossess your car, or place a lien on your property. Exceptions to the automatic stay exist, however, and creditors can go into court and ask the judge to lift remove the automatic stay. You'll turn over supporting paperwork. At least five days before the meeting of creditors more below , you'll send documentation to the trustee or the court in some jurisdictions that proves the statements made in your bankruptcy paperwork.
You can expect to forward your most recent tax return, along with bank statements, paycheck stubs , and more, depending on the requirements of the trustee assigned to your case. You'll attend the meeting of creditors. Every filer must attend one meeting of creditors hearing conducted by the bankruptcy trustee. You can expect the trustee to verify your identity and ask you questions about your petition and finances. Creditors can, but often don't, appear to ask questions.
You'll complete a financial management course. A filer must complete a debtor's education course in addition to the credit counseling received before filing for bankruptcy before receiving a discharge. The court will issue the bankruptcy discharge. After completing the requirements above, the court will grant a bankruptcy discharge and the automatic stay will end. Keep in mind that states may have different exemptions and limits that you can or must use when filing bankruptcy.
A trustee can't take property when its value is less than the exempt amount, which means you may be able to keep your home and vehicle. A similar scenario could play out with other forms of secured debts, such as an auto loan. However, just because the trustee can't take and sell these assets doesn't mean you'll get to keep them in the long run.
When you're behind on your payments, your creditors can still foreclose on your home or repossess your vehicle once you complete the bankruptcy process.
If you want to keep possessions that are securing your debts, you may have to continue making payments on the loan if you're not already behind or pay the full price to purchase the item.
Generally, the entire Chapter 7 process from the initial credit counseling to the point when the court discharges your remaining debts takes about four to six months. Your case could take longer, however, such as when the trustee asks you to submit additional documents or if they have to sell your property to repay creditors. Or, perhaps you want to try to get your student loans discharged in bankruptcy.
It's possible, but difficult, and can require a lengthy trial. A Chapter 7 bankruptcy is a major derogatory mark that can hurt your credit for years to come. The Chapter 7 bankruptcy record can stay on your credit reports for up to 10 years from the filing date, and a completed Chapter 13 bankruptcy can remain on your credit report for seven years from the filing date.
The accounts that were included in your bankruptcy may fall off your credit report earlier, as most negative marks get removed after seven years. How to File for Chapter 7 Bankruptcy You can choose to file for Chapter 7 bankruptcy on your own or hire an attorney to help.
Some legal aid centers and nonprofit credit counseling agencies may also be able to offer you free assistance. Once you determine that you're eligible, the process will be largely the same:. Filing bankruptcy can be financially, physically and emotionally draining. However, it may be your best option when bills keep piling up and you don't have the means to pay your creditors. It's also possible to recover from bankruptcy and rebuild your finances and credit, but it will take time.
What's on Your Credit Report? The purpose of this question submission tool is to provide general education on credit reporting. The Ask Experian team cannot respond to each question individually. However, if your question is of interest to a wide audience of consumers, the Experian team may include it in a future post and may also share responses in its social media outreach.
Compensation may factor into how and where products appear on our platform and in what order. But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates. Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can. If you qualify, Chapter 7 bankruptcy may allow you to discharge a variety of debts, but typically excludes obligations like child support, student loans or tax debt.
The repercussions of filing Chapter 7 bankruptcy can include losing some of your physical assets and having your credit take a major hit. Chapter 7 bankruptcy may be able to offer the financial reset you need, but you should know about the drawbacks before you consider filing.
Once you file your petition, some of your creditors could be temporarily stopped from most collection actions against you or your property. In this article, you'll learn about the basics of Chapter 7 bankruptcy , including who can file, the forms you'll need, how the process works, and what happens to your property and debts.
Not everyone qualifies for a Chapter 7 discharge. You'll qualify if your gross income is lower than your state's median income. If it's higher, you'll still qualify if, after paying allowed monthly debts, you don't have enough left over to feasibly complete a Chapter 13 repayment plan. Other requirements exist, too. For instance, you won't be able to use Chapter 7 bankruptcy if you already received a bankruptcy discharge in the last six to eight years depending on which type of bankruptcy you filed.
And where you can file will depend on how long you've lived in the state. Learn more about the Chapter 7 eligibility requirements.
The Chapter 7 bankruptcy process takes about four to six months. Your bankruptcy begins after you file a petition and other forms with the bankruptcy court in your area. On the forms, you'll include information about:.
In addition to filing the bankruptcy forms, you must also complete credit counseling with an agency approved by the United States Trustee. You'll find approved agencies for each state on the U. Trustee's website. Click "Credit Counseling and Debtor Education. Filing for Chapter 7 bankruptcy puts into effect something called the "automatic stay.
So, at least temporarily, creditors cannot legally grab "garnish" your wages, empty your bank account, go after your car, house, or other property, or cut off your utility service.
Learn more about bankruptcy's automatic stay. By filing for Chapter 7 bankruptcy, you are technically placing the property you own and the debts you owe in the hands of the bankruptcy court.
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