Chapter 7 Bankruptcy Process Part 1
The first thing that needs to be done in the chapter 7 bankruptcy process is the compilation and preparation of the information needed to file the bankruptcy petition. The petition is signed under the penalty of perjury, therefore it is important that the information that you provide is truthful and accurate. A questionnaire will be provided to you to assist you with the preparation of the required information. The information will then be reviewed with you, and then given to a legal staff member to enter into a computer system which will allow for the electronic filing of most or all of your bankruptcy papers. Your bankruptcy protections do not begin until the original paperwork is filed with the Court and the filing fees have been paid. That is when the protection of the Automatic Stay begins.
In 2005, Congress added new requirements for people filing consumer bankruptcies. They were concerned that bankruptcy attorneys were not exploring enough non-bankruptcy options with their clients, and developed a requirement that anyone seeking to file bankruptcy must first be screened by an independent non-profit credit counseling agency at least one calendar day before a bankruptcy petition is filed. This class normally takes about thirty minutes, and focuses on the consumer’s monthly income and expenses. A certificate is then issued and must be included when the bankruptcy petition and other initial papers are filed with the Bankruptcy Court. This initial certificate is often referred to as the “ticket in.” Additionally, Congress also requires people who have filed bankruptcy to take a second class, the Debtor Education class, and upon completion of this 45-minute class, to file a Certificate with the Court showing the course was completed. This certificate is often referred to as the “ticket out.” Finally, Congress also now requires that attorneys representing people filing bankruptcy pull an independent credit report which lists the names and addresses of a filer’s creditors. Accordingly, this has also added an additional layer of costs to the filing of a bankruptcy case (about $50 each for the “ticket in,” “ticket out,” and the credit report).
We will discuss more of the Chapter 7 Bankruptcy Process in our next few articles, so make sure to come back for more!
By: Joel S. Treuhaft, Esquire