The Charlottesville law firm of Robert S. Stevens can help you file for Chapter 7 bankruptcy in Albemarle County, VA, in the Western District of Virginia. This article describes the eight steps and timeline to file for bankruptcy protection.
Filing Chapter 7 in Albemarle County, VA
Filing for Chapter 7 bankruptcy may seem overwhelming — but like many complex processes, it breaks down into manageable steps.
If you’ve determined that filing for bankruptcy is your best option, this article will help you understand the steps and timeline. Knowing what to expect will make the process less stressful and will simplify communication with your attorney. Before we begin, let’s review what Chapter 7 bankruptcy is and how it differs from Chapter 13.
Chapter 7 vs. Chapter 13
Chapter 7 bankruptcy is often referred to as “straight bankruptcy” because it involves liquidating all nonexempt assets. (Exempt assets are those the law lets you keep.) The trustee disperses the money raised from the sale of your nonexempt assets to your creditors, such as hospitals, banks, and credit card companies. Once the disbursement process is complete, creditors are no longer allowed to contact you for payments.
The advantage of filing Chapter 7 protection is that the court will eliminate your debt. You won’t be obligated to repay your creditors. The disadvantage is that the court will sell your nonexempt assets.
Typically, Chapter 7 is best if you’re unemployed or your income is low. It also may be your best option if you have marital problems or a large amount of unsecured debt.
Chapter 13 bankruptcy, on the other hand, is preferable if you earn or receive enough income to pay down your debt but need time to do so. Filing for Chapter 13 reorganizes your debt, forming a realistic payment plan that’s based on your income. Repayment plans typically last 3 to 5 years. Provided you honor your payment plan, the trustee discharges any remaining debt when the repayment period ends.
The advantage of filing for Chapter 13 protection is that the court will allow you to retain possession of assets such as your car or home that a court may force you to liquidate in a Chapter 7 bankruptcy. The disadvantage is that you will be required to repay your creditors.
Steps to File Chapter 7 Bankruptcy
Although no two Chapter 7 bankruptcy cases are exactly alike, the steps are consistent. Here is what you can expect when you choose Chapter 7 protection:
Step 1: Select a Bankruptcy Attorney
The single most important step you can take is choosing the right attorney.
Bankruptcy never has a one-size-fits-all solution, which is why selecting an experienced and compassionate bankruptcy lawyer is so important. The best bankruptcy attorneys guide you in managing your assets and maximizing your opportunities to yield the best outcome for your finances and future.
The best part of filing for bankruptcy protection is putting your troubles behind you. Choosing an excellent bankruptcy attorney is your first essential step to make that happen.
Robert Stevens has successfully represented clients for over a quarter-century — but it isn’t just Bob’s experience that sets him and his firm apart. At Robert Stevens Law Firm, we believe in listening and treating our clients with the respect they deserve. That means you will receive compassion, attention, and a personalized strategy for success.
Step 2: Complete Pre-Bankruptcy Credit Counseling
You will complete a non-profit credit counseling course within 180 days before filing for bankruptcy. This course can be completed online or by phone and must be done through an agency certified by the U.S. Trustee’s office. We’ll help you initiate this process.
Credit counseling is intended to deter people from filing bankruptcy when a payment plan is likely to suffice. You must complete the Credit Counseling course, even if you are certain you can’t repay your debts. The agency will examine your income and expenses to determine if bankruptcy is your best option.
When we file your bankruptcy paperwork, we’ll include the completion certificate provided by the credit counseling agency. We’ll also include a copy of your repayment plan if you have completed one with the credit counseling agency.
Step 3: File Bankruptcy Forms
Official bankruptcy forms for Charlottesville and Albemarle County (Western District of Virginia) are available online. We will help you complete them. The forms require you to disclose all aspects of your financial affairs for the last two years, including:
- A list of all assets and liabilities
- Current income and expenses
- A statement concerning your financial situation
- A schedule detailing any outstanding leases and executory contracts
- Tax returns from most recent tax year, and any filed within 180 days of your case
At this point, we’ll help you submit your credit counseling certificate and repayment plan. If your obligations consist mostly of consumer debt, you may need to submit additional paperwork, including:
- Income received within 60 days of the filing date
- Any expected increases in income or expenses
- All interest in tuition or education accounts
Step 4: Send Documents to the Bankruptcy Trustee
Once your paperwork is in order, we’ll mail it to your court-appointed bankruptcy trustee. This official will review your tax return and other documents. If additional paperwork is needed, the trustee will let you know, and we’ll help you understand what else the trustee is requesting.
Step 5: Attend a Creditors’ Meeting
The only time you’ll have to be physically present during bankruptcy proceedings is at the creditors’ meeting, which takes place in a hearing room with the trustee. Most meetings take under five minutes, and it is rare for creditors to actually appear at this meeting. You will be sworn in and then answer questions about the information in your bankruptcy paperwork.
Step 6: Complete Post-Bankruptcy Budget Counseling
You will need to complete the Post-bankruptcy Budget Counseling course, also referred to as Pre-discharge Debtor Education, within 60 days of the creditors’ meeting. Post-bankruptcy budget counseling builds on lessons from the first course. It includes help with budgeting, managing your finances, and adhering to a feasible plan in order to obtain the fresh start you deserve.
This course is available online or by phone. The online version does not require a conversation with counselors. Once you’ve completed it, you’ll submit a simple form and certificate confirming you’ve done so. We’ll be available to answer any questions that may arise.
Step 7: Maintain a Holding Pattern
In bankruptcy, a holding pattern refers to the period in which you cannot sell or give away property without the permission of the trustee. During this period, you’ll need permission to operate a business that owns inventory. It is worth noting that creditors have the right to object to your requests to sell or give away property, but this rarely happens.
Step 8: Receive a Written Discharge of Debts
An official discharge of your debts will arrive when the holding pattern concludes, typically around two months after the creditors’ meeting. You’ll then turn over nonexempt assets for liquidation — for instance, if your car is not deemed necessary for work or caring for a dependent, the court will repossess it and distribute money from its sale to creditors. The same goes for your non-essential belongings.
The trustee may schedule an appointment to assess your belongings if they have reason to believe your own reporting is inaccurate. When it is time to collect nonexempt belongings, the trustee may arrange to pick them up or have you deliver them yourself.
Commonly exempted items include tools, books, clothing, furniture, bedding, and appliances. A good attorney will help you maximize the number of “exempt” assets to ensure that the majority of your belongings do not qualify for repossession. All nonexempt assets are still liquidated, but the best bankruptcy lawyers work to minimize the assets you’re required to forfeit.
You can always appeal to the court to keep items you consider essential, but hiring an experienced and compassionate bankruptcy attorney is crucial to keeping the property you need.
Come to Robert Stevens Law Firm for the Best Outcome
Bankruptcy is about hitting the reset button on your finances. Robert Stevens has the experience, connections, and compassion to help you start fresh with Chapter 7 or Chapter 13 bankruptcy. Get started on the next chapter of your life with a FREE consult! Contact us today!
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