Chapter 7 Bankruptcy Process

: Reese Baker & Associates

  Filed under: Chapter 7

If you have the choice on which chapter of the bankruptcy code for personal bankruptcy, most people would choose Chapter 7. Chapter 7 is the quickest and easiest form of bankruptcy. You can have the entire process over in three to six months and come out the other side with all of your qualifying debt eliminated.

Unsecured Debt

Chapter 7 bankruptcy discharges almost all of your unsecured debt like credit cards, medical bills, personal loans, back utility bills, and payday loans. Some unsecured debt like alimony, child support, taxes, and most student loans can not be eliminated in bankruptcy.

If you decide Chapter 7 is the best choice for you, some steps must be followed to ensure your case has a successful outcome.

Bankruptcy Attorney

The first decision is to find a qualified bankruptcy attorney. It is essential to have someone in your corner that is familiar with the procedures and gives you the best chance of getting every possible benefit of bankruptcy.

Financial Analysis

You and your attorney will go over your average monthly income and your average monthly expenses. The option to choose either your state or federal exemptions if your state allows. The average median income in the area that you live and if you have mostly secured or unsecured property to determine the best chapter of the bankruptcy code to file.

Means Test

To file Chapter 7, you must pass the means test. If your income is lower than the average monthly income in your state, you will pass the means test. If you make more than the people in your area, you may be directed to file Chapter 13 instead.

Completion of Credit Counseling

The law regulates that you complete two credit counseling courses. The first one must be completed before you file your bankruptcy paperwork. You can find a list of approved counseling providers at the U.S. Justice Department website ( The second is a pre-discharge debtors education course intended to teach you how to make better financial choices in the future.

Submit Your Case

When you have the first credit counseling certificate and your bankruptcy forms filled out, you can file with the court in your area. The automatic stay will go into effect when your papers are submitted. This stay prevents all collection attempts against you while your case is active.

Meeting of the Creditors

Approximately one month after filing your papers with the court, you will attend a meeting of the creditors. You, your attorney, and your spouse, if you are filing jointly, must attend this informal meeting, rarely do your creditors attend. The trustee will ask you questions about your paperwork and if you understand your rights and other options available to you. This meeting can last a few minutes to half an hour.

If your trustee finds that you have a property that is not exempt, they may be sold to satisfy your creditors. Rarely do people lose any property in Chapter 7 bankruptcy. Your attorney can help you find the best exemptions to suit your needs. If you have a home or vehicle, you must continue to make the payments if you wish to keep them.


Once you have completed your Chapter 7 case, the judge will discharge any remaining debts in your petition. You will no longer be legally responsible for the debt eliminated in your case.

If you have questions about bankruptcy and how it can benefit you, contact a Houston bankruptcy attorney today.