What you have to do to file a Chapter 7 Case and what happens during the Case?


Apr 2017

What you have to do to file a Chapter 7 Case and what happens during the Case?

by Ellen Ray in

Once you have paid all the fees you have been quoted and provided us with all the documents we have requested from you, we will set you an appointment to sign your petition and at that time, once you have reviewed all the paperwork thoroughly and signed where required, we will file the petition with the court.  At this time, and not before, you will have all the protections given by federal law against collection as well as from being sued in state court for nonpayment.

After your case is filed you must provide us with the full bank statement for every checking or savings bank account you have open at the time you file the case.  You cannot get a discharge until we have the full statements and we must have them before we can help you protect the money that was in the accounts at the time you filed, which we must do before the hearing with the trustee.  My office may call and remind you that we need these statements at the end of the first week of the month after you file the case (when you should be receiving the statement in the mail or online) but even if we do not call you, you must remember to send us the statements by mail, email or fax immediately after they are available to you from your bank(s) or credit union(s).

Within about 40 days of filing the case, you will be required to attend a meeting with the trustee at the Federal Courthouse on East Broad Street.  This meeting is required and your case can be dismissed by the court if you do not attend. The meeting date and time is usually on a Monday, Tuesday or Friday and is set by the court computer the day after your case is filed.  This date cannot be changed for any reason other than that you are in the hospital or in jail or something happens on your way to the meeting that makes it impossible for you to attend, like a car accident.  If any of the reasons listed here apply to you, you need to call my office immediately upon finding out that you cannot attend and we will give notice to the trustee that the meeting needs to be rescheduled.  If you do not contact us and provide one of the reasons listed above and you do not attend the meeting, then your case will be dismissed and the only way to get it back on track is to have me filed a motion to reinstate the case with the court which will cost you a minimum cost of $250.00.  The meeting with the trustee does not usually take more than about 10 minutes, but you may have to wait for up to 2 hours for your name to be called after you arrive so it is important that you leave about 2.5 hours plus travel time to and from the courthouse on the date of your meeting.

At this meeting, the trustee will ask you if you have told the truth on the paperwork you signed, if you have moved or changed jobs and if you have listed all of your creditors on the petition.  He will also ask you to show him your social security card and picture ID to prove that you are the person who filed the petition with the court.  You are not generally asked any questions that you have not already been asked by my office, and the trustee does not usually ask you any personal questions about why you filed the case.  You will be asked to review a list of questions and sign at the bottom saying the answers are correct before the meeting his held.  We usually go over this worksheet either at the office when you sign the petition or at the courthouse when you first arrive for the hearing.  If you change your address or change jobs between filing the case and meeting with the trustee, you will need to make sure that you let us know at the meeting of creditors before you are called to meet the trustee.

You will be required to complete a second part of the counseling which is usually referred to as a financial management or budget course. We ask that you complete this course after you receive your case number and before you have your meeting with the trustee if you can.  If you direct the agency you do the class with to send me a copy of the certificate of completion, they will email or fax a copy to me and I will file it with the court as soon as I get it.  You cannot receive a discharge in your case if you have not received this certificate.  If you do not do the second part of your counseling within the first 45 days after your case is filed with the court, there will be an extra $250.00 fee charged to you in order for me to file a motion to have the time period extended so that you can still get your discharge.  If we do not have a copy of the certificate for the second part by this date, we will contact you and let you know that you have incurred the extra fee which we would need to receive before we could file the motion to allow you more time. If the certificate is not received by us within the first 60 days after filing your case, you may not be eligible for an extension of time so it is very important that you either complete the second counseling session and verify with my office that we have received the certificate, or contact my office and explain why you have been unable to complete the counseling and what you are doing to remedy the situation.

Approximately 3.5 months after you file the case, if you do all you are supposed to do and attend the meeting of creditors, after providing us proof that you have done the second part of your counseling, you should receive your discharge order in the mail.  This means that all debt eligible for discharge has been discharged by the court and you are finished with the case.  Unless my office has told you otherwise for some reason, my representation of you in the case or on any other matter ends at this time.  You may hire me for other services needed in the future but the fees and costs you paid for my services to file the chapter 7 case have been totally earned upon discharge.  It is very unlikely that you would be denied a discharge and, if you are denied a discharge, it would be because you did not provide me with all the information I requested or because you were not completely forthcoming with the answers to my questions or the trustee’s questions or because you did not show up for hearings that were set in your case, and no fees or costs paid would be refundable in this situation.

The discharge of your case will only apply to creditors who are unsecured, non-priority creditors or to secured creditors if you have surrendered to them the property they financed.  If you have a home that is financed, you will be personally discharged from the debt which means they can never collect against your personal bank account or pay check if you do not pay, but they will still have the right to foreclose on the home and remove your name from the deed, if you do not make the regular monthly payments to them both before and after you file the case.  If you are paying a creditor who holds the title to your vehicle, you also need to continue to pay them if you wish to keep the vehicle and get the title when you finish paying the debt.  If you do not pay for your house or your car, then you may lose them either during your case or after your case is discharged, although you will not owe the debt personally if they do take the property back unless you have been specifically told otherwise by my office during your case.

The following types of creditors are not dischargeable in a chapter 7 case under current law:

Most taxes due at the time you file your case (if any taxes you owe are discharged, we will let you know before your case is filed)

Child and spousal support either due at filing or that comes due in the future

Fees of Guardian ad Litem attorneys assessed against you by a court due to a custody or visitation action

Student loans owed for tuition or owed on a government guaranteed student loan

Any debt incurred in the six months before the case is filed if a creditor files paperwork with the court asking for a determination that they should be paid and the court agrees with them (if this occurs, you will be notified and you may either negotiate with them directly or represent yourself in court or pay the additional fees shown on the retainer agreement to hire me to negotiate or represent you)

Any court assessed costs or fees due to driving infractions or restitution orders or fines or costs assessed in any criminal action (this can include parking fines in some cities and states although Virginia usually does not send their parking tickets through the court so they are dischargeable)

Some fees assessed by DMV

Any debt determined to have been obtained through fraud by the court after a hearing or agreement by you if a creditor files a motion to determine whether the debt should be discharged by the court (if this occurs, you will be notified and you may either negotiate with them directly or represent yourself in court or pay the additional fees shown on the retainer agreement to hire me to negotiate or represent you)