How does Chapter 7 work?
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How does Chapter 7 work?

| Aug 22, 2020 | Bankruptcy

Before you file for Chapter 7, you need to understand the fine details about this type of bankruptcy.

According to the United States Courts, people can file for Chapter 7 if they are private citizens. Business partners and business owners are also eligible for this kind of bankruptcy.

What happens during Chapter 7?

If you file for Chapter 7, the court will assign a trustee to your case. This trustee usually holds a meeting with all your creditors. You typically need to attend this meeting and answer questions about your property and your financial situation. Additionally, the trustee may ask to see your financial records to understand the full extent of your situation. After this, the trustee sells certain assets to pay your debts.

What steps do you have to take?

If you think that Chapter 7 is the right option for your situation, you can file a petition with a Nevada bankruptcy court. You usually have to provide the court with detailed information about your situation. This information includes:

  • A list of your expenses and income.
  • A list of your liabilities and assets.
  • Your current contracts, such as equipment or real estate leases.
  • A statement describing your financial situation.

Additionally, you need to make sure your trustee has copies of your tax returns

You need to attend credit counseling before you can officially begin the bankruptcy process. During these sessions, you discuss alternatives to bankruptcy to ensure Chapter 7 is the right solution. Once you complete this counseling, you receive a certificate. You usually need to provide a copy of this certificate to the court. Once you provide all the necessary documentation, the court officially begins the bankruptcy process.