Chapter 7 Bankruptcy
Once I receive a call from an interested debtor, I will engage in a brief conversation about their situation to get a sense of where they are. If they seem like a good candidate for bankruptcy then I will send a list of information and required documents to them to bring to our first meeting. As you can imagine, I am asking for a complete picture of their financial life for the last couple of years.
1. All 3 credit reports
2. 6 months of pay stubs
3. 2 most recent tax returns
4. Title/Deed to everything they own
5. Most recent auto loan and mortgage statements
6. Completed intake questionnaire
For more on this go to my intake page.
Credit Counseling Requirement
Debtors must complete a credit counseling class with an approved institution within 180 days of the case being filed.
A chapter 7 case starts with a voluntary petition being filed with the division of the Maryland bankruptcy court assigned to the county where the individual or couple lives or where the business debtor is organized or has its principal place of business or principal assets.
Under new rules, married debtors regardless of sexual orientation can now file joint cases unlike in the past where it was defined as man and woman.
Along with the petition, the debtor also files:
(1) schedules of assets and liabilities
(2) a schedule of current income and expenditures
(3) a statement of financial affairs
(4) a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007(b).
(5) Statement of current monthly income
(6) Means Test
The chapter 7 filing fee was raised to $335.00 as of June 1, 2014. The filing fee can be paid in four (4) installments as long as a request is made to the court at the time of filing. 28 U.S.C. § 1930(a); Fed. R. Bankr. P. 1006(b); Bankruptcy Court Miscellaneous Fee Schedule, Item 8. The number of installments is limited to four, and the debtor must make the final installment no later than 120 days after filing the petition. Fed. R. Bankr. P. 1006. Sometimes debtors are unable to pay the filing fee in time and with the court’s permission they can get more time after demonstrating a good reason for the request. Failure to pay will result in dismissal.
Upon filing your chapter 7 case, a trustee is automatically assigned. The trustee is a court appointed official who reviews your case to ensure compliance with the law and maximize recovery for your creditors.
As a debtor, you are required to provided a copy of most recent tax return or transcripts for the most recent tax year as well as any returns filed while the case is pending 11 U.S.C. § 521. Proof of income over the sixt (60) days prior to thefiling of your case. For those with jobs, pay stubs and commission pay outs are required. Self-employed individuals must prepare profit and loss statements.
The schedules filed in the chapter 7 provide the court and your creditors the following information:
A list of all creditors and the amount owed
List of exempt property
Debtor’s monthly living expenses, from rent, food to entertainment.