A Chapter 7 bankruptcy is powerful medicine to get you back on the right financial path.
In a Chapter 7 bankruptcy, we file a number of documents with the bankruptcy court. As soon as we file, the "automatic stay" kicks in. This means that creditors cannot continue to harass you. It also means that any lawsuits that have been filed against you must stop, any garnishments must be removed, and any scheduled foreclosure sales must be cancelled.
About a week after we file your Chapter 7 bankruptcy, we will receive a notice of a 341 meeting - or meeting of creditors. This is an opportunity to meet the trustee assigned to the case. The trustee will ask you questions about your filing. If you have any assets the trustee is interested in selling or seizing to pay your creditors, the trustee will also ask about those during this meeting. Your creditors also have the right to ask you questions about your assets and your intention.
For 60 days after your 341 meeting, your creditors have the right to challenge their debts being discharged. If assets are sold or seized to pay off creditors, that will also happen during this period of time.
Most bankruptcies are discharged four months after they are filed. All of your debts are now gone. Although you may pay off a pre-existing debt if you want to, but you have no legal obligation to do so. Also, any attempt to collect on those debts discharged in bankruptcy is a violation of the "permanent stay." Now you have a fresh start to rebuild your credit without nagging debts holding you back from your financial goals.
If you are interested in learning more about Chapter 7 bankruptcies, contact me for your free consultation at 801-788-4122 or fill out the form to the right.