In this article...
In this article we discuss the Chapter 7 bankruptcy process including filing the bankruptcy petition, taking credit counseling courses, preparing bankruptcy schedules, appearance at the first meeting of creditors, and creditors' objections to discharge.
Filing for bankruptcy can be an overwhelming process. There are a considerable number of documents to gather, forms to fill out, and courses to complete when filing for bankruptcy. Your attorney will determine which forms the Bankruptcy Court requires for your particular situation and can help you complete them properly. However, your attorney is only as helpful as the information you provide. If your records are shoddy, then completing the forms could take a couple of tries, which costs you valuable time and money. That’s why diligence and organization is crucial in bankruptcy.
Regardless of the chapter of the Bankruptcy Code that you and your attorney decide to file under, there is some basic information that you will need to assemble. Below is a checklist that the attorneys at O’Flaherty Law ask their bankruptcy clients to complete before filing the petition to ensure the bankruptcy process goes as smoothly as possible.
Credit Counseling Course: You will need to complete an accredited online credit counseling course. Go to the Justice Department's Credit Counseling & Debtor Information and find your state in the drop-down menu. If you live in Chicago or one of the collar counties, you need to find a course accredited by the Northern District of Illinois. Most courses are approximately $50 and will take a couple of hours to complete. At the end of the course, you will receive a Certificate of Completion by e-mail. Provide your bankruptcy attorney with that certificate.
Schedules: You will need to fill out schedules, listing all of your assets, liabilities, income, and expenses. Please use the linked Schedules as a worksheet to help organize your finances before you meet with your attorney. Your attorney can then ensure that everything was filled out properly and answer any questions. Below is a breakdown of what each schedule entails and how to complete it properly:
- Schedule A - List all of your real property (i.e., land, houses, condos, etc.), the approximate value of the property, and the amount of debt secured by the home. Be sure to include all loans secured by your home, such as mortgages and home equity lines, when calculating the secured debt.
- Schedule B - List all personal property that you own and the approximate value of the property. Personal property includes more than we often think it does. Please review this schedule carefully because it is itemized to ensure you do not miss anything. Use Kelly Blue Book to value your motor vehicles and use resale values for your furniture, collectibles, luxury items, etc.
- Schedule C - This schedule lists property that is considered “exempt” for bankruptcy purposes. This means that the trustee cannot take these assets from you in order to satisfy debts to your creditors. I have purposely excluded Schedule C from the linked .pdf because every state has different rules regarding what kind of property is exempt and for what amount. This schedule is better left for your attorney to complete.
- Schedule D - List all debt that is secured by collateral, such as mortgages, car loans, etc. Include the name and address of the creditor, as well as the account number and amount of the debt.
- Schedule E - This schedule lists the kinds of debt that you will not be able to discharge through bankruptcy. Check off and list all debt that falls into the categories listed on Schedule E.
- Schedule F - List all other debt that you have not listed on previous schedules. This will consist of unsecured debt, which is any debt that is not secured by collateral (i.e., credit card debt, medical bills, etc.).
- Schedule G - List all leases and executory contracts (i.e., timeshares) that you are subject to.
- Schedule H - List all “codebtors” and the name of the creditor to whom debt is owed by you and the codebtor. A codebtor is someone whose name is also on any of the debt listed in Schedules D, E, or F.
- Schedule I - List your monthly income by filling out this schedule accordingly.
- Schedule J - List all monthly expenditures by filling out this schedule accordingly.
Proof of Income: Gather and provide your attorney with evidence (i.e., paystubs) of all payment received by you within the two months prior to filing the petition.
Proof of Payments: Gather and provide your attorney with evidence of all payments toward your debts that you have made within the three months prior to filing the petition. If you have paid back debt to a family member, keep track any payments made within one year prior to filing the petition.
Fees: Gather the necessary amounts for attorney’s fees and court costs. Typically, attorneys in the Downers Grove area charge anywhere from $1,300-$2,500 for a Chapter 7 or Chapter 13 filing, and attorneys will typically require a flat fee for a Chapter 7 filing. The court filing fee is $306 for Chapter 7 and $281 for Chapter 13. Keep in mind that certain amendments made to the Schedules during the course of the bankruptcy proceeding may carry additional fees.
Financial Management Course: Keep in mind that you will be required to complete an online Financial Management course toward the end of the bankruptcy proceeding. The completion process is similar to that of the Credit Counseling course.
What to Expect From a Consultation
The purpose of a consultation is to determine whether our firm is a good fit for your legal needs. Although we often discuss expected results and costs, our attorneys do not give legal advice unless and until you choose to retain us. Consultations may carry a charge, depending on the facts of the matter and the area of law. The cost of your consultation, if any, is communicated to you by our intake team or the attorney.