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An Overview of Chapter 7 Bankruptcy
You must also file a certificate showing that you have completed credit counseling with an agency approved by the United States Trustee. (For a list of approved agencies in each state, go to the Trustee's website, http://www.usdoj.gov/ust, and click "Credit Counseling and Debtor Education.")
If you're facing an emergency, like a foreclosure or repossession in the next few days, you can file just the two-page petition, but you must file the rest of the forms within 15 days.
Bankruptcy's Magic Wand -- The Automatic Stay
Filing for bankruptcy puts into effect an "Order for Relief" -- known informally as the "automatic stay." The automatic stay immediately stops most creditors from trying to collect what you owe them. So, at least temporarily, creditors cannot legally grab ("garnish") your wages, empty your bank account, go after your car, house, or other property, or cut off your utility service or welfare benefits. For more information, see How Bankruptcy Stops Your Creditors: The Automatic Stay.
Bankruptcy Court's Control Over Your Financial Affairs
By filing for bankruptcy, you are technically placing the property you own and the debts you owe in the hands of the bankruptcy court. You can't sell or give away any of the property you own when you file, or pay off your pre-filing debts, without the court's consent. However, with a few exceptions, you can do what you wish with property you acquire and income you earn after you file for bankruptcy.
The Bankruptcy Trustee
The court exercises its control through a court-appointed person called a "bankruptcy trustee." The trustee's primary duty is to see that your creditors are paid as much as possible on what you owe them. And the more assets the trustee recovers for creditors, the more the trustee is paid.
FAQs
- Are there advantages to filing under Chapter 7?
- What debts will not be eliminated if I file for Chapter 7?
- So if the value of my house is more than the exempt value, will I lose it? What exactly does the above list mean?
- What about if I decide the trustee or creditor is right and I want to change my Chapter 7 bankruptcy. Can we just agree to do it?
- Do exemptions vary much between states?
Bankruptcy and Debt Resources
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