A Chapter 7 bankruptcy can provide individuals with a fresh start by eliminating overwhelming debt burdens. However, this form of debt relief requires extensive paperwork and adherence to specific legal requirements.

An attorney can assist in completing the process and ensure accurate form completion. It can save time, money, and stress.

Know Your Exemptions

If you face mounting debt, bankruptcy may give you the relief you need to start over. However, the debt relief process is complicated, and you must take steps to protect the property you own and other rights. A Rockland Chapter 7 bankruptcy lawyer can assist you with these concerns.

Bankruptcy is a federal court proceeding, but the law allows each state to make its own rules on which property can be exempt from creditor claims. It means that if you own a home, car, or other assets with equity above the amount allowed by your state’s exemption laws, it could be liquidated in bankruptcy.

For this reason, it is essential to know which assets are protected and which are not before filing for Chapter 7 bankruptcy. A competent bankruptcy lawyer can help you maximize the benefits of this type of relief by ensuring that your home, vehicle, and retirement accounts are safe from liquidation.

Create a Post-Bankruptcy Budget

Before filing for bankruptcy, you will need to create a budget. It will help you understand exactly where your money is going and ensure your financial goals are met.

When creating your budget, start by determining your net take-home income. It will include your taxes and all employer deductions like health insurance, 401k, and car allowance.

Then, allocate your income to necessary spending categories such as food, entertainment, utilities, and housing. Lastly, add in an emergency savings account. It would help if you aimed to save three to six months’ worth of expenses so that you do not have to rely on credit cards in case of unexpected expenses.

To help you stick to your budget, switch to using cash for the first month or two and only use a debit card when necessary. Once you feel confident that your debit card spending is on track with your budget, gradually expand your expense categories.

Create a Debt Repayment Plan

When you file for Chapter 7 bankruptcy, the Bankruptcy Court immediately imposes an injunction against creditors (the Automatic Stay) that prevents them from taking any action to collect on debts. It includes lawsuits, wage garnishments, collection calls, bank restraints, and foreclosures. It is one of the most significant benefits of filing for Chapter 7 bankruptcy.

A successful Chapter 7 bankruptcy involves a clear plan for paying off debt. During your bankruptcy, you will list all the debts you owe and determine how much money to put toward each one. 

Schedule a Meeting of Creditors

Once your bankruptcy case is filed, the court will schedule a meeting of creditors, known as a 341 meeting. You will receive a notification in the mail with the meeting details, including the date, time, and location. The bankruptcy trustee presiding over your case will lead the meeting and ask questions. The questions asked during the conference are meant to verify that the information in your bankruptcy filing is correct and complete.

You must attend the meeting and bring a valid government-issued photo ID. You must also bring your bankruptcy attorney with you to the meeting.

Creditors rarely appear at the 341 meeting and will only have limited questions for your bankruptcy lawyer. However, if a creditor does show up, you must answer any questions they may have under oath. The meeting will usually last 20 or 30 minutes at most. It is the only mandatory hearing that you will need to attend.