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Chapter 7 at a Glance

Chapter 7 Bankruptcy is often referred to as a "Liquidation Bankruptcy." Unfortunately, this misleading term ("liquidation") frequently has the effect of scaring people to believe, if they file for Chapter 7 Bankruptcy Protection, all of their assets will be liquidated and sold. The general public's fear is absolutely misplaced. With our knowledge of the law and expertise in ascertaining potential difficulties that could occur, we estimate that less than 1% of The Drazin Law Center's clients are forced to have their assets sold when they file for protection utilizing the Chapter 7 Bankruptcy Proceeding.

The formal Chapter 7 Bankruptcy process is initiated with the filing of a Bankruptcy Petition with the Federal Bankruptcy Court.

The instant the Chapter 7 Bankruptcy Petition is filed, due to the immediate imposition of the "Automatic Stay" your Creditors and Debt Collectors must cease any and all collection activity levied against you. This Federal legal directive requires Creditors not to call you, send you bills, sue you, garnish your wages, or harass you in any way. Once you file for Chapter 7 Bankruptcy protection, it is illegal for the Creditors to do so and, therefore, the Creditors almost always voluntarily cease their collection efforts. If the Creditors fail to do so, the specific Creditor may be held in Contempt of Court and seriously fined.

Through a Chapter 7 Bankruptcy proceeding, you may surrender any Secured Property that you no longer desire to maintain, retain, or keep; for example, cars, trucks, houses, or furniture. Should you choose to surrender such Secured Property, in almost all instances you will no longer be required to pay any more funds towards the property's associated debt and you will alleviate and eliminate any remaining liability(ies). On the other hand, should you choose to retain the secured item of property (car, house, truck, furniture, etc.), you must continue to timely make and maintain your regular (usually monthly) payments.

Approximately one month after your Chapter 7 Bankruptcy filing, you are required to attend one short Administrative Hearing usually referred to as the Meeting of Creditors or more formally the 341 Hearing. The Meeting of Creditors is conducted by a Chapter 7 Trustee. The Trustee is not a Judge and does not have any independent judicial powers. The Trustee is simply a Court appointed representative of your Creditors. It is the Trustee's duty to review your Bankruptcy case to determine if you qualify for the Chapter 7 Bankruptcy protection. The Trustee is required to ascertain whether you have any Non-Exempt Assets that may be available to pay Creditors or if you have too much income to qualify for Chapter 7 (that is, usually a household income higher than the regional average or "mean"). In most situations, in that The Drazin Law Center will have already forwarded the Trustee copies of the Required Documentation (such as wage statements, tax returns, etc.), the Trustee will simply ask you only a few questions, review a few documents and then close or finalize the hearing. The average Meeting of Creditors takes only 5 to 10 minutes in a Chapter 7 Bankruptcy proceeding. An attorney from The Drazin Law Center will be sitting directly next to you to ensure the Meeting of Creditors proceeds as smoothly as the circumstances allow.

Most assets owned by the individuals who file for protection utilizing the United States Bankruptcy laws are completely exempt from the Creditors. Exempt assets may include real estate equity, automobile equity, bank accounts, pensions, and home furnishings. Although there are limitations to the amount of the exemptions, such limitations will be fully explained to you at your Free Initial Consultation with the attorneys at The Drazin Law Center. If your situation is such where you somewhat exceed the limitations, we can give you the same quality Legal Services intentionally and repeatedly used in the past to negotiate with the Chapter 7 Trustee to protect and redeem your assets. Again, if such a situation applies in your specific instance, the attorneys at The Drazin Law Center will review strategies with you that may be legally implemented prior to the Chapter 7 Bankruptcy filing to minimize the risk of your having to surrender assets. Keep in mind, there are some categories of debts that are usually not dischargeable. The most common of these non-dischargeable debts are student loans, child support, alimony, certain taxes, and debts incurred by fraud. Fraud can include the use of credit cards within the ninety (90) days prior to the filing of your Bankruptcy Petition. Don't worry, utilizing the complete information you will forward to us, if there are any debts in your action that are not dischargeable, we will inform you before your case is filed.

Assuming no problems arise and no objections are filed in your Chapter Seven Bankruptcy proceeding (a very unlikely event when your matter is prepared and handled by the attorneys at The Drazin Law Center), you will receive a formal Discharge of Bankruptcy in approximately two to three months after the conclusion of the Meeting of Creditors. Your Chapter 7 Bankruptcy proceeding is then closed and the Creditors included in your Bankruptcy action can never again in the future attempt to collect their debts against you; regardless of how much you may earn in the future or what other assets you may acquire.

Most individuals who desire the protection afforded by the filing of a Bankruptcy proceeding wish to file a Chapter 7 proceeding. Call or contact the Drazin Law Center today to schedule your Free Initial Consultation!