What Should I Expect After I File for Chapter 7 Bankruptcy?

The consumer bankruptcy process is extremely complicated, even for people who have some familiarity with the law because of the recent bankruptcy case of a family member or close friend. As such, it can be difficult to know what exactly you should expect when you do file for bankruptcy. For consumers, there are two types of bankruptcy that make up most personal bankruptcy cases — Chapter 7 bankruptcy and Chapter 13 bankruptcy. Since these types of bankruptcy are quite different from one another, it is important to understand that, while there will be some similarities after the initial bankruptcy filing, these types of cases will take different paths.

Today we want to focus on Chapter 7 bankruptcy, which is a type of liquidation bankruptcy. Once you do file your bankruptcy petition—which you should always do with assistance from a bankruptcy lawyer—what should you expect to happen? The following are some of the central events that you should anticipate once you have filed for Chapter 7 bankruptcy.

Automatic Stay Will Take Effect

The automatic stay is one of the most powerful tools in a bankruptcy case, and it will take effect once you have filed your bankruptcy petition (this is true for both Chapter 7 and Chapter 13 bankruptcy cases). Indeed, under U.S. bankruptcy law, filing the bankruptcy petition triggers the automatic stay. What is the automatic stay? It stops all further legal actions against the debtor and prohibits creditors or debt collectors from moving forward with any actions to collect on debts that are owed, including repossessing property like an automobile or garnishing your wages. It also prevents creditors or debt collectors from initiating any new actions against you. Once the automatic stay takes effect, creditors and debt collectors cannot even call you or contact you by mail.

Bankruptcy Trustee Will be Assigned to Your Case

You should also anticipate that a bankruptcy trustee will be assigned to your case. The bankruptcy trustee is responsible for administering your estate, including the liquidation of non-exempt assets, as well as handling questions at the meeting of creditors, or the “341 hearing.”

Meeting of Creditors Will be Scheduled

Speaking of the meeting of creditors, which is also known as the 341 hearing, this meeting will be scheduled shortly after you file for bankruptcy. You must attend this hearing, which gives the bankruptcy trustee and any creditors the right to ask questions about your assets and finances, and any matters included in your bankruptcy petition. Your bankruptcy attorney will be able to attend this meeting with you to help you manage any questions that arise. While most 341 hearings involve only the trustee asking questions, you should know that your creditors also are allowed to attend and may do so.

Non-Exempt Assets Will be Liquidation

The trustee will oversee the liquidation of non-exempt assets. You should know that Illinois has numerous bankruptcy exemptions allowing debtors to retain a wide variety of assets in a Chapter 7 bankruptcy case.

You Will Complete a Debtor Education Course

Before your debts can be discharged in your Chapter 7 bankruptcy case, you will need to complete a debtor education course. You should not expect the court or the trustee to reach out to you about this. Rather, you should speak with your lawyer about scheduling the course.

Contact Our Oak Park Bankruptcy Lawyers

Do you have questions about your Chapter 7 bankruptcy case? Our Oak Park bankruptcy attorneys are here to help. Contact the Emerson Law Firm for more information.



See Related Blog Posts:

Bankruptcy and Disability Benefits: What You Should Know

Can I File for Consumer Bankruptcy Even if I am Unemployed?

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