The following, by no means, attempts to address all of the points in filing a Chapter 7 Bankruptcy. (Note the standard disclaimer.) Every situation is unique. This is simply an outline to give you an idea of what to expect and what is expected of you. It is possible to do all of this yourself. It's called pro se (or, "file it yourself" in Latin) One of the many problems with do-it-yourself is, once you screw it up, it often costs more to fix it than what you would have paid a professional in the first place. Exhibit A; when I bought my last house, I decided to replace a ceiling fan. The previous owner got a little carried away and had a lot of extra wires in the ceiling I didn't recognize. I connected everything and hoped for the best. When we flipped the switch, we were witness to a pyrotechnics display that rivaled the Eiffel Tower's millennium celebration (We applauded!) Then, I called an electrician*.
Now, on with the show! First, when the paperwork is filed, you'll have to list your creditors, then, a list of assets and liabilities, (what you have vs. what you owe), a list of exempt property, (protected stuff), a schedule of how much you're making now and what you have to pay (utility bills, car payments, mortgage, etc.), a statement of your financial affairs, and a statement of intent regarding consumer debts secured by property of the estate. (Just wanted to see if you were paying attention.) In other words, you have a house; are you going to continue to live in it or move and give it back to the mortgage company? Are you going to continue to drive 'ole Betsy' or call the finance company to "pick her up?"
Next, letters are sent out to all of your creditors by the clerk of the court. (Postage paid!)
Then, a meeting of your creditors is called and you're invited! Actually you're required to attend. They will ask you about your debts and whether or not you can pay them. Creditors can object to your list of exemptions within 30 days after the meeting. They also have 90 days to file a claim. If anything's left over after all of the claims are paid, the court may grant an extension to any creditors that didn't file within the 90-day period. The trustee can object to any claim as well. The creditors have 60 days following the first creditors meeting. If there are no objections and no motions to dismiss are pending, the court will ordinarily grant the discharge after the 60 days are up. (*Insert your professional counsel here!)
There are some debts which are not dischargeble. (The good news is, there are only a few, the bad news is, you'll have a few more years to pay off that student loan.) There isn't enough room here to list every instance or coverage, that's the problem with information, there's just too much of it. Oh, and one more thing, once you file, your creditors can't pursue you or your property, outside of the bankruptcy proceeding. Bottom line, they can't sue you, call you, or send you a postcard.
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