Filing of Petition and Schedules

A chapter 7 bankruptcy case begins with the filing a petition with the bankruptcy court serving the area where the individual lives.  Spouses may file a joint petition or individual petitions. In addition to the petition, the debtor must also file with the court: (1) schedules of assets and liabilities, (2) a schedule of current income and expenditures (for calculation of the “means test”),   (3) a statement of financial affairs, (4) paycheck stubs for the 60 days prior to filing and (5) a certificate of completion of the pre-filing credit counseling course. Debtors must also provide the chapter 7 bankruptcy trustee assigned to the case with a copy of the tax return or transcripts for the most recent tax year.

Automatic Stay

Filing a petition under chapter 7 bankruptcy “automatically stays” (stops) most collection actions against the debtor or the debtor’s property. But filing the petition does not stay certain types of actions listed under 11 U.S.C. § 362(b), and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

Creditors’ Meeting

Filing a petition for relief under chapter 7 bankruptcy “automatically stays” or stops most collection actions against the debtor or the debtor’s property. But the filing of the petition does not stay certain types of actions listed under 11 U.S.C. § 362(b), and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

Discharge of Debt Order

In most no-asset chapter 7 bankruptcy cases, the Bankruptcy Court issues its discharge order about five months after the bankruptcy case is filed.