Filing Chapter 7 Bankruptcy

First you must file your paperwork with a bankruptcy court. The paperwork consists of the official petition, the statement of financial affairs, and the schedules. The documents contain a detailed list of your debts, including:

• All priority debts (including taxes)
• All "secured" debts (including home mortgages and auto loans) that have property as "collateral"
• All unsecured debts of any kind

The other major form is the statement of financial affairs.

It contains:

• Personal and financial information
• Personal financial information as well as information about your background
• A list of all transfer and gifts made in the last year, among other items

It is extremely important that the statement of financial affairs and schedules be completed accurately. Debts that are not listed in this statement may not be discharged at the completion of the bankruptcy proceeding. A failure to list assets may be deemed an attempt to hide them from creditors, and may result in serious consequences, including the denial of a discharge or charges of bankruptcy fraud.

Automatic Stay

The filing of a bankruptcy case, under any chapter of the Bankruptcy Code, triggers an injunction against the continuance of most actions by any creditor against the debtor or the debtor's property to collect a debt. 11 U.S.C. 362.

What Happens at the 341 Hearing?

This is a hearing attended by you, your trustee, and any creditors which may choose to appear. No judge is present.

The trustee will ask you questions after you are placed under oath to determine the truth, accuracy of your schedules, and statement of financial affairs. This is a very serious proceeding and may give rise to criminal charges should it be discovered that a debtor is committing perjury or intentionally hiding assets from creditors. These types of crimes are prosecuted by the United States Attorney's Office and investigated by the FBI.

The meeting of creditors proceeding is recorded. The trustee asks a series of questions.  Once the questions have been answered, any creditor who may be present have an opportunity to ask questions, the meeting is concluded. The trustee may ask for additional documents or have additional questions that could be posed at a later time. However, for many individuals this is the last contact they will have prior to entry of their bankruptcy discharge.

For more information on bankruptcy issues, please view our bankruptcy advice page. Together we have compiled a list of frequently asked questions from consumers and businesses regarding bankruptcy.

If you are interested in determining if Chapter 7 bankruptcy protection is right for you or your business please contact the Sarasota Bankruptcy Lawyers R. John Cole II & Associates at (941) 365-4055.  It is our goal to find the right solution for our clients.