What persons should not file under Chapter 7?
March 28, 2008
A person who is not eligible for a chapter 7 discharge should not file under chapter 7. Also, a person who has substantial debts that are not dischargeable under chapter 7 should not file under chapter 7. In addition, it may not be wise for a person with current income sufficient to repay a substantial portion of his or her debts within a reasonable period to file under chapter 7, because the court may dismiss the case as constituting an abuse of chapter 7. Although it is not a legal requirement, some experts say that a chapter 7 case should not be filed unless a person’s dischargeable debts exceed the value of his or her nonexempt assets by at least two thousand dollars.
What happens to the property that the debtor turns over to the trustee?
March 28, 2008
It is usually converted to cash, which is used to pay the fees and expenses of the trustee and to pay the claims of unsecured creditors. The trustee’s fee is usually $45 plus a percentage of the amount collected from the debtor.
What persons are eligible to file under chapter 7?
March 28, 2008
Any person who resides in, does business in, or has property in the United States may file under chapter 7, except a person who has been involved in another bankruptcy case that was dismissed within the last 180 days on certain grounds.
What are the debtor’s responsibilities to the trustee?
March 28, 2008
The law requires the debtor to cooperate with the trustee in the administration of a chapter 7 case, including the collection by the trustee of the debtor’s nonexempt property. If the debtor does not cooperate with the trustee, the chapter 7 case may be dismissed and the debtor may be denied a discharge.
What persons are not eligible for a chapter 7 discharge?
March 28, 2008
The following persons are not eligible for a chapter 7 discharge:
(1) A person who has been granted a discharge in a chapter 7 case filed within the last eight years.
(2) A person who has been granted a discharge in a chapter 13 case filed within the last eight years, unless 70 percent or more of the unsecured claims were paid off in the chapter 13 case.
(3) A person who files a waiver of discharge that is approved by the court in the chapter 7 case.
(4) A person who conceals, transfers, or destroys his or her property with the intent to defraud his or her creditors or the trustee in the chapter 7 case.
(5) A person who conceals, destroys, or falsifies records of his or her financial condition or business transactions.
(6) A person who makes false statements or claims in the chapter 7 case, or who withholds recorded information from the trustee.
(7) A person who fails to satisfactorily explain any loss or deficiency of his or her assets.
(8) A person who refuses to answer questions or obey orders of the bankruptcy court, either in his or her bankruptcy case or in the bankruptcy case of a relative, business associate, or corporation with which he or she is associated.
What is a trustee in a chapter 7 case, and what does he or she do?
March 28, 2008
The trustee is an officer of the court, appointed to examine the debtor, collect the debtor’s nonexempt property, and pay the expenses of the estate and the claims of creditors. In addition, the trustee has certain administrative duties in a chapter 7 case and is the officer in charge of seeing to it that the debtor performs the required duties in the case. A trustee is appointed in a chapter 7 case, even if the debtor has no nonexempt property.
What debts are not dischargeable under chapter 7?
March 28, 2008
All debts of any kind or amount, including out-of-state debts, are dischargeable under chapter 7 except the debts listed below. The following is a list of the most common debts that are not dischargeable under chapter 7:
(1) Most tax debts and debts that were incurred to pay federal tax debts.
(2) Debts for obtaining money, property, services, or credit by means of false pretenses, fraud, or a false financial statement if the creditor files a complaint in the case (included here are debts for luxury goods or services and debts for cash advances made within 60 days before the case is filed).
(3) Debts not listed on the debtor’s chapter 7 forms, unless the creditor knew of the case in time to file a claim.
(4) Debts for fraud, embezzlement, or larceny, if the creditor files a complaint in the case.
(5) Debts for alimony, maintenance, or support and, if the creditor files a complaint in the case, certain other divorce-related debts including property settlement debts.
(6) Debts for intentional or malicious injury to the person or property of another, if the creditor files a complaint in the lease.
(7) Debts for certain fines or penalties.
(8) Debts for educational benefits and student loans are not dischargable unless a court finds that not discharging the debt would impose an undue hardship on the debtor and his or her dependents.
(9) Debts for personal injury or death caused by the debtor’s operation of a motor vehicle while intoxicated.
(10) Debts that were or could have been listed in a previous bankruptcy case of the debtor in which the debtor did not receive a discharge.
What happens after the meeting of creditors?
March 28, 2008
After the meeting of creditors, the trustee may contact the debtor regarding the debtor’s property, and the court may issue certain orders to the debtor. These orders are sent by mail and may require the debtor to turn certain property over to the trustee, or provide the trustee with certain information. If the debtor fails to comply with these orders, the bankruptcy case may be dismissed and the debtor may be denied a discharge.
What is a chapter 7 discharge?
March 28, 2008
It is a court order releasing a debtor from all of his or her dischargeable debts and ordering the creditors not to attempt to collect them from the debtor. A debt that is discharged is one that the debtor is released from and does not have to pay. Some debts, however, are not dischargeable under chapter 7, and some persons are not eligible for a chapter 7 discharge.
When must a debtor appear in court in a chapter 7 case and what happens there?
March 28, 2008
The first court appearance is for a hearing called the “meeting of creditor.” This hearing usually takes place about a month after the case is filed. At this hearing the debtor is put under oath and questioned about his or her debts and assets by the hearing officer or trustee. In most chapter 7 consumer cases no creditors appear in court; but any creditor that does appear is usually allowed to question the debtor. If the bankruptcy court decides not to grant the debtor a discharge or if the debtor wishes to reaffirm a debt and is not represented by an attorney, there will be another hearing about three months later which the debtor will have to attend.