Understanding Chapter 7 Bankruptcy in St. LouisChapter 7 – a.k.a. “liquidation bankruptcy” — is the most common bankruptcy chapter filed in the country, and the one that most people are familiar with. However, this doesn’t mean that most people who are contemplating filing for Chapter 7 bankruptcy in St. Louis have the basic facts and understanding they need to decide if this is the right option for them. On the contrary, at the Law Office of Charles H. Huber our team regularly meets with clients who have been misled by something they read on the Internet, or heard from a well meaning — but not fully informed – family member, friend or colleague.
To help address some of these fundamental misunderstandings, we’re pleased to provide the following overview of Chapter 7 bankruptcy in St. Louis:
The Essence of Chapter 7 BankruptcyDebtors who file for Chapter 7 bankruptcy in St. Louis are asking the court to allow them to have all of their non-exempt assets sold by a bankruptcy trustee, who will then use the proceeds of that sale to pay creditors an agreed-upon amount. Non-exempt assets include any property that can be sold by the court.
Preparing to File for Chapter 7 Bankruptcy in St. Louis
Debtors who plan on filing for Chapter 7 bankruptcy must organize all of their financial information (e.g. bank statements, credit card statements, loan documents, pay stubs, etc.), and complete a series of documents including a bankruptcy petition, statement of financial affairs, statements and so on. Since all of this information will be verified by the bankruptcy trustee, it is essential that everything is organized and complete. If there is any discrepancy between the documents submitted to the court and a debtor’s financial information, the filing will not proceed.
Debtors who file for Chapter 7 bankruptcy in St. Louis must also pass what is known as a “means test.” This test annualizes a debtor’s income for the previous six months and analyzes it against the median income for their place of residence. The purpose is to verify whether a debtor in fact has the financial means to pay down their debts. Since its introduction in 2005, the means test has been highly controversial, and is widely considered a measure introduced by Congress in order to decrease the number of Chapter 7 bankruptcy filings around the country.
The next step involves a meeting of creditors, who are notified by the courts that a Chapter 7 bankruptcy has been filed. During the meeting, the designated bankruptcy trustee ensures that all information related to the bankruptcy is accurate. The debtor may also be expected to answer specific questions from any creditor related to the bankruptcy. If one creditor meeting is not sufficient to answer all inquiries, the trustee may schedule additional meetings.
The next step in the Chapter 7 bankruptcy process is for the bankruptcy trustee to seize all non-exempt property, which will be sold and proceeds distributed to creditors as authorized by the court. Exempt property includes assets such as 401(k) plans. All exempt property must be listed in Schedule C of the bankruptcy filing and approved by the court.
Discharge from Chapter 7 Bankruptcy
Debtors who file for a discharge are asking the court to prevent any creditor from attempting to collect on debts incurred prior to the bankruptcy filing. In some cases, the trustee or a creditor(s) may object to a debtor being discharged, and may submit a complaint to the court with a specific time period. Furthermore, not all debts can be discharged, such as certain taxes and spousal or child support obligations. In addition, creditors may still pursue financial recovery from a co-debtor who did not file for Chapter 7 bankruptcy in St. Louis.
Learn More About Chapter 7 Bankruptcy
Are you considering filing for Chapter 7 bankruptcy in St. Louis? Then give the Law Office of Charles H. Huber a call today. We have over 30 years of experience in bankruptcy, and will provide you with the answers and insights you need to manage your debt and get the full legal protection you want, need and deserve.
Remember, regardless of what creditors or others may tell you: it is your legal right to file for Chapter 7 bankruptcy in St. Louis!