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What happens when you file for Chapter 7 bankruptcy?

On Behalf of | Dec 12, 2015 | Chapter 7 Bankruptcy, Firm News

For many Florida residents, bankruptcy is the best way to remedy their financial issues. A successful Chapter 7 bankruptcy often gives individuals and their families a fresh financial start. Getting to that point, however, requires adherence to certain rules and deadlines. Missing even one step or deadline can result in a dismissal of the case.

Therefore, it is a good idea to involve an attorney. The first step is to complete a means test to determine whether you are even eligible to file for Chapter 7 bankruptcy. If you qualify, the deadlines begin even before you can file. For instance, you must complete a credit counseling course within 180 days before filing. You must be able to prove that you established residency in Florida at least 90 days prior to filing, and refrain from using credit cards during that same period in order to avoid the debt becoming non-dischargeable.

Once the petition is filed, an automatic stay is put in place that stops all collection activities during the proceedings. Within 30 days of filing, you will have to decide whether to reaffirm certain debts, such as your car loan. Before the expiration of six weeks after filing, the meeting of creditors will occur — after which creditors will have 30 days to object to the discharge of your debts. If all of your paperwork is completed properly and all deadlines have passed, a Chapter 7 can be discharged in approximately six months.

Chapter 7 bankruptcy discharge frees you from the obligation to pay the debts that are included in it. The process may seem simple, but in reality, it can be rather complex and frustrating. Having an attorney on your side can make the process less intimidating and help you in regaining financial stability.

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