When an Illinois resident's financial challenges have reached the level at which he or she is considering filing for bankruptcy, the circumstances will dictate which chapter is the best one for them. When the decision is made that Chapter 7 bankruptcy fits the criteria, they will often have questions as to how the entire process works. Understanding this is imperative to having the case go according to plan.
With Chapter 7, the debtor files a petition with the bankruptcy court. It is necessary to file: the schedule of assets and liabilities; a schedule of current income and spending; a statement detailing the financial affairs; and a schedule of unexpired leases and executory contracts. The trustee in the case must receive a copy of the most recent tax returns while the case is in process. If the debts are primarily consumer-related, it is necessary to file a certificate that a credit counseling course was taken. Evidence of income from employers must be filed within 60 days before the filing. A record of interest the debtor might have in education or tuition accounts must be given to the trustee.
People who are married can file jointly or separately. Married couples who file jointly must provide all the necessary individual information. There will be a $245 case fee and a miscellaneous administrative fee of $75. It is possible to make these payments in installments if the situation warrants it. The debtor must provide the following information: the list of creditors and their claims; the source, amount and frequency of the income; the debtor's property in full; and a list of living expenses per month. With Chapter 7, the collection attempts on the part of the creditors will stop immediately. The trustee will have a meeting of creditors within 21 to 40 days of the filing. The debtor is required to be at the meeting and answer questions about the situation. The debtor must cooperate fully with the trustee.
People who are in credit card debt or have accrued debt in other ways might be worried about the Chapter 7 process. Discussing the case with a lawyer who is experienced in helping clients achieve debt relief through Chapter 7 can answer question and assuage fears to move forward with a case to get back on stronger financial ground.
Source: uscourts.gov, "Chapter 7 -- Bankruptcy Basics -- How Chapter 7 Works," accessed on May 23, 2017