There are two forms of consumer bankruptcy used by individuals to help resolve debt: Chapter 7 “liquidation” bankruptcy and Chapter 13 “wage earners” bankruptcy.

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Chapter 7 bankruptcy is the most common form of consumer bankruptcy and is also referred to as “straight” or “discharge” bankruptcy. Chapter 7 is generally available to individuals whose household income is situated at or below the state’s median income.  If someone’s income is above the median income, they may be steered toward Chapter 13 Bankruptcy instead, but not necessarily in every case. There are other reasons why someone may choose Chapter 13 bankruptcy over Chapter 7 bankruptcy.

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Read more about chapter 7 issues and procedure on Wartchow Law’s Chapter 7 Blog.

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The Chapter 7 bankruptcy process begins in a consultation with a bankruptcy attorney who will evaluate your situation, assess your assets and debts, and advise you of any issues specific to your circumstances.  Before you file a Chapter 7 petition and schedules, your bankruptcy attorney will ask to see copies of your financial records and statements, credit report, income statements and paystubs, tax returns and other homestead documents relevant to your case. Also, you will be required to take a pre-bankruptcy credit counseling class that can be done online, over the phone or in person at a designated agency, and provide the credit counseling certificate to your lawyer.

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Once your information is gathered and analyzed, it is put into a petition and schedules that is filed with the Bankruptcy Court. A trustee is then assigned to your case to administer any non-exempt property or assets. About one month after you file, you will attend the 341 Meeting if Creditors with your bankruptcy attorney, during which the Chapter 7 trustee will ask questions regarding the petition and schedules that were filed with the bankruptcy court.

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Bankruptcy attorney Lynn Wartchow can evaluate which form of bankruptcy works under your circumstances.  If bankruptcy is not your best option, we can suggest non-bankruptcy alternatives that may be a better fit for you.