What are the requirements to file?
You must have the type of income that passes the “means test”.
The means test is based on IRS median income statistics for the area where you live. There are two ways to pass the means test.
The first is simple, have an income that is below the median level. If you or your household income for joint filers, is below the median income for you area, you are qualified.
In the event your income is over the median, then your income and expenses must be reviewed through a complicated process established by the government.
What information is needed to file?
Call us today to schedule an appointment and we will go over everything that is needed. We will not file your petition unless we have everything and we will make sure to tell you what you need.
Remember, the consultation is free. Take advantage of it.
What does this process look like?
The Bankruptcy Code is a large, convoluted law that requires knowledge and experience in handling. While an attorney is not needed to file a Chapter 7, a debtor should proceed with caution as there are many pitfalls in preparing, filing and completing a Chapter 7. The process of filing Chapter 7 is most easily understood as work done prior to filing and work done after filing.
The first thing to understand is what we mean by “filing”. Filing means taking a prepared petition and filing it with the United States Bankruptcy Court of the Northern District of Illinois. Once a petition is filed the bankruptcy court assigns a Trustee. This trustee is actually a practicing attorney who is contracted by the United States Trustees office to help manage your petition through out the proceedings. Your trustee will review your petition and will conduct the 341 Meeting of creditors. “341” is the section of the bankruptcy code relating to the meetings. With that, we will move on to “Prior to Filing and “After Filing”
1. Prior to Filing
Prior to Filing the law requires us to interview you and review all your financial documents (call for more info about the financial documents that are needed). During the interview we will fill in parts of your petition.
Many people wonder how long it takes before we file. This is completely controlled by you. This means the following:
- You must complete the required credit counsel course. Go to the following link for approved agencies. This course can be completed via phone, web or in person. In addition, this should cost approximately $50.
- You provide us all the documents we request and you participate in the preparation, review and signing of your petition. The petition MUST include every creditor you have, including credit card, medical bills, car loans, mortgages and yes friends/family members. You cannot choose which creditors are and are not listed on your petition.
- You pay all fees in full. (Fees are discussed below in the section “What does a Chapter 7 Cost?”)
This means YOU are in complete control of when the petition is filed.
Call today to schedule your interview and get the process going!
2. After Filing
You have two major responsibilities. The first is completing a financial management course. This course can be completed with the same company that you took the credit counseling course with or another . Second you must attend the 341 meeting of creditors and have your social security card and driver’s license.
I want to spend a few minutes discussing the meeting of creditors. It is natural for everyone to feel some anxiety regarding this meeting. Because of this we feel it is best for you to understand a little bit about this meeting. Here are the basics of the 341 meeting.
- Who: The meeting is the first and likely only time that the trustee, yourself, our firm and creditors will be in the same room together. Any creditor listed on your petition is permitted to come to this meeting to challenge the discharge. However, their attendance is very u
nlikely. Even if they do attend it is very difficult for them to successfully block your discharge of the debt. You basically should plan on the meeting only involving the yourself, us and the trustee.
- When: The meeting is typically scheduled to take place about forty days after your petition is filed. The meetings are set between 12pm and 5pm on weekdays. All information regarding the date and time of the meeting will be mailed to you and all your creditors with-in approximately ten days of filing your petition. If for some reason you can not attend, the trustee will permit one continuance.
- Where: Depending on your address the meeting is held in various locations. If you are a cook county resident, the meeting is held at the Federal Court House a.k.a the Dirksen Building in downtown Chicago. If you are unable to attend the meeting due to incarceration, medical reasons or some other emergency, the trustee has the discretion to due the meeting via a phone call. Please understand this is only used in very limited situations and simply not having a ride to the meeting is not enough. You must show good cause why you can not physically attend. This must be cleared prior to your meeting date.
- Why: Why does the meeting happen? Because it is typically the only time you are personally questioned by someone other than your attorney about your petition. They need to see if you have any assets and that you are not abusing the bankruptcy code. Moreover, the meeting is necessary to allow you to complete the discharge. Bottom line it is required by law.
- What: What happens at the meeting? The trustee asks for your social security card and drivers licenses to clarify it is you. He or she will then swear you in. Then he/she will review your petition with you. All information is open for discussion. The meeting usually takes only about five minutes, so time is limited. Some sample questions are:
o Do you own any real estate or have you owned any in the past few years?
o Are you part of any suits against anyone?
o Has anything changed on the petition?
o Did you review and receive a copy of the petition?
o Are you going to receive a tax return?
o If you come into any major money in the six months, you know it is your obligation to report such to me, do you know and understand this?
Bottom line the trustee has the right to ask you anything about the petition and your finances. You must make sure to fully disclose anything. Failing to do so could lead to perjury charges. The best thing to do is fully disclose and let them decide what is important to review.
Once you leave the meeting, your work is likely done, unless the trustee requests a bit more information or a creditor challenges the discharge. Each are VERY unlikely. From the date of the 341 meeting you have about sixty days until final discharge. Once you receive the final discharge notice the debts are gone. Bottom line the time frame from filing to discharge is typically ninety days.
What does a Chapter 7 cost?
We believe it is impossible to accurately quote a one size fits all fee. You should expect to pay between $1,200 and $2,000 for a Chapter 7 which will include attorney fees and $300 of court costs. Our firm does not quote a fee until we meet with you and analyze your case. The initial meeting, which will last about forty-five minutes, it is a FREE CONSULTATION. While we do not actively fee compare with other firms, we believe our fees are competitive. Moreover, when you hire our firm you are paying for an Attorney and not support staff to handle your file. Many of our clients have found this to be very important and we encourage you to view our TESTIMONIALS to see how we perform.
What happens after my discharge, will I ever get Credit Again?
That depends on you. The bankruptcy will free you up from all bad debt and allow you to concentrate on the future. Your future should include getting to know your credit score and how you can improve it. Please clink on Credit Score to learn more about how your credit score is derived.