In 2005 the Federal Bankruptcy Guidelines were changed, and today in 2012 those guidelines still remain. The guidelines were put in place to weed out those consumers that might try to file bankruptcy even though they could afford to pay their creditors. Of course these laws were backed by credit card companies and banks that wanted to make it more difficult for people to file bankruptcy so they would stop losing money. Whether or not you agree with the guidelines you will have to work within them if you want to file bankruptcy today. So what are the requirements for Chapter 7?
Before you even file bankruptcy you will have to complete a credit counseling course through an approved agency. Most of these agencies have online and phone courses so you can complete the course from home in as little as 30 minutes. The typical cost is about $25, so it’s rather painless. The course is meant to give you an understanding of your decision and possibly convince you that bankruptcy isn’t right for you. There is no test or anything.
Once you have completed the credit counseling course you can file your chapter 7 bankruptcy petition. The petition contains all of your personal financial information such as your debts, assets, income, expenses, and a statement of intention about what you plan to do with property you own but still owe money on.
Once your petition is filed the bankruptcy trustee in your district will schedule a 341 hearing which can be attended by your creditors. Most of the time creditors do not appear, but you should be prepared to answer questions posed by them. The trustee will confirm your information and ask you about anything he needs more information on. This meeting is usually over in about 5 minutes unless there are problems at which time a hearing may be scheduled.
Personal Financial Management Course
Before your bankruptcy can be discharged you must complete a personal financial management course. You will receive a notice from the court letting you know when this class must be completed by in order to receive your bankruptcy discharge. Much like the credit counseling course this class can usually be completed in person, over the phone, or online. This course helps you create a budget to stay on track after your bankruptcy and give you financial tips to avoid financial problems in the future.
Chapter 7 Discharge
The final step in any chapter 7 is the discharge, this is the end when all of your debts are formally wiped away! You will receive a discharge notice in the mail and can start rebuilding your credit.