The beginning point of any bankruptcy case is the filing of what is called the petition for relief. The petition contains all the information necessary to tell the court about your current financial situation and supports the request that a judge sign an order saying the debts that are eligible should be discharged.
There are several different parties involved in the Chapter 7 bankruptcy process after the petition for relief is filed with the court. Article I, Section 8 of the Constitution gives Congress the power to regulate the bankruptcy system. Congress writes the bankruptcy laws. The entire bankruptcy system is overseen by an office in the federal Department of Justice called the United States Trustee Program (USTP).
The USTP has offices all around the country to monitor bankruptcy cases. These offices are responsible for monitoring the system for fraud by creditors and debtors and inform Congress if they see problems in the system.
There are also individual trustees assigned to monitor each case that is filed and is authorized to act in the best interest of your creditors. If you have filed for Chapter 7 bankruptcy, you will have to complete specific steps in order to finish the proceeding and have your debt discharged.
The entire process will be handled in the United States Bankruptcy Court’s Minnesota locations and will be overseen by a specialized Bankruptcy Court Judge.
The process after filing
Chapter 7 bankruptcy can be a relatively simple process compared to other types of bankruptcy. After your petition is filed, the court appoints a trustee. The trustee is usually an attorney, and the trustee’s role is to review the documents you submitted. The trustee’s job is to act on behalf of your unsecured creditors and make sure there is no avenue of recovery for them. In the vast majority of Chapter 7 cases, the trustee does not find anything to distribute to creditors and the debtor keeps everything they have.
The 341 meeting
After your trustee is appointed to handle your case, the court notifies you of a “341 meeting,” also called the meeting of the creditors. It is called a 341 meeting because that is the section of the Bankruptcy Code that requires debtors to appear to be questioned about their petitions. Your creditors can ask you questions about the information contained in your petition, like your asset, debts, income, and expenses at this hearing. Most hearings are relatively short, since creditors don’t come to most of them. This meeting is usually the only court appearance an individual who is filing for Chapter 7 relief ever has to attend. The judge does not attend these hearings.
Option of Reaffirming Debts
You will also have the option of reaffirming debts you have, meaning that you will still make payments on them after filing for bankruptcy. You should think long and hard about reaffirming a debt. A formal reaffirmation agreement has to be signed by you and the creditor and filed with the court in order to be binding. Signing a reaffirmation agreement is essentially telling the court that you can handle the debt being reaffirmed, and the debt is an essential one for you. The judge has to review and approve a reaffirmation agreement, so it is prudent to enter into them sparingly.
Financial Management Course
After your petition is filed you must complete a financial management course. This course usually has a slightly different focus than the credit counseling course you take to begin the bankruptcy process. The credit counseling course focuses more on what your current situation is. The financial management course is designed to give you some strategies for improving your financial management skills like budgeting and evaluating credit offerings you will receive in the future.
Receiving Debt Discharge
If you file all the proper paperwork to begin your case, go to the meeting of creditors, complete the financial management course, and file any appropriate reaffirmation agreements with the court, you will receive your discharge, and then your case will be closed.
Get help from a Twin Cities bankruptcy lawyer
Filing for bankruptcy can be a complicated process, and a bankruptcy lawyer is an invaluable asset during this stressful time. The experienced lawyers of Martin & Hedervare PLLC have guided countless Minnesota families through bankruptcy and other debt relief proceedings. Our seasoned attorneys are prepared to serve clients in Minneapolis, St. Paul and surrounding communities. Contact us at (651) 243-2974 to set up a consultation today.