Chapter 7 Bankruptcy Basics

Under Federal Law Chapter 7 bankruptcy is a process by which you are discharged, or freed, from the obligation of paying your debts. Filling for Chapter 7 bankruptcy initiates an “automatic stay,” which stops all forms of collection acts against you.

How Chapter 7 Works

In order to start the process of filing for Chapter 7 bankruptcy, one must fill out a petition to the court. One must also have a list of all assets, liabilities, income, expenditures, and contracts involving co-debtors along with any other forms of financial engagement. Florida bankruptcy laws do permit a husband and wife to file jointly or individually.

People filing for bankruptcy must have a variety of information readily available to complete the forms. An attorney can help you to make sure that you have all of the appropriate documents. Husbands and wives filing joint petitions must be certain to have the necessary documents for both parties involved.

The “automatic stay” is effective immediately after the petition is filed. The court clerk notifies the creditors that they cannot collect on debts any longer.

Not long after the petition is filed, the court clerk organizes a “meeting of creditors.” Both debtors and creditors are required to be at the meeting. During the meeting, both parties discuss the nature of the applicant’s financial situation. Husbands and wives that have filed jointly must both attend the meeting. To keep matters as objective as possible, the trustee also questions the debtor during the meeting. Judges do not attend.

Discharge Legal Overview

The complexity of the Florida Chapter 7 bankruptcy law can be overwhelming. Debtors should probably seek legal advice before filing. Usually, 99 percent of legitimate Chapter 7 cases are approved. Judges grant a discharge within 90 days of the first meeting of creditors.

Judges rarely deny an applicant Chapter 7 bankruptcy. When it does happen, it usually happens for a number of reasons. When an applicant fails to clearly explain his reason for filing bankruptcy, commits perjury, does not obey court orders, or conceals pertinent information, his case may be dismissed.

The information provided on Ferderal Bankruptcy law is accurate up to the date of publishing. It should not be taken as legal counsel or authority. It should not be used as a substitute for the United States Bankruptcy Code and the Federal Rules of Bankruptcy Procedure. Please visit your local library for a more in-depth and authoritative source of information.

The Haverhill bankruptcy law specialists at the Eric N. Klein & Associates, P.A. firm want to assist you with any questions you might have. Call them today at 561-353-2800.

Portions reprinted from the office of the US Department of Justice.