Ready to Leave Debt Behind? Here’s Your Step-by-Step Guide
Are you struggling with overwhelming debt? A Chapter 7 bankruptcy attorney in Charlotte, NC, can help you understand your options and guide you through bankruptcy. This guide walks you through each step of Chapter 7 bankruptcy, from your first meeting to the final discharge of your debts.
Chapter 7 bankruptcy or “liquidation bankruptcy” can clear most unsecured debts and give you a fresh start. However, the process involves several essential steps, deadlines, and requirements.
Understanding these steps helps you know what to expect and how to prepare. In this guide, you’ll learn about each phase of Chapter 7 bankruptcy – from initial consultation through completing required courses, attending meetings, and finally receiving your discharge order.
Key Takeaways:
- Filing Chapter 7 bankruptcy starts with meeting an attorney to review your financial situation. You must complete credit counseling and pass a means test to qualify. After filing your petition, an automatic stay protects you from creditors while you complete the required steps toward discharge.
- During bankruptcy, you’ll meet the trustee to answer questions about your finances under oath. You must also take a financial management course to learn better money habits. Most cases end with discharge about 60 days after the creditors’ meeting.
- The bankruptcy process requires careful documentation of your assets, debts, income, and expenses. Your attorney files all paperwork with the court and guides you through each step. When completed, discharge eliminates most unsecured debts, though some debts like student loans and child support remain.
Initial Consultation
Your first step is meeting with a bankruptcy attorney. During this meeting, you’ll discuss your financial situation and learn if Chapter 7 suits your situation. Bring these items to your consultation:
- Recent pay stubs or income proof
- Tax returns from the last two years
- Bills and collection notices
- Bank statements from all accounts
- Credit card statements
- Vehicle titles and mortgage documents
- Recent credit reports
- List of monthly expenses
The attorney will review these documents to understand your complete financial picture. They’ll check if you meet Chapter 7 requirements and explain which debts can be eliminated.
This meeting also covers what property you can keep through bankruptcy exemptions. North Carolina law lets you protect certain assets, including equity in your home, car, and personal belongings. Your attorney will explain how these exemptions apply to your situation.
Pre-Bankruptcy Requirements
Before filing Chapter 7 bankruptcy, you must complete two necessary steps:
- First, take a credit counseling course from an approved provider. This six-month rule means you must finish the course within 180 days before filing for bankruptcy. The course takes about 90 minutes and can be completed online or by phone. You’ll learn about budgeting basics and alternatives to bankruptcy.
- Second, pass the means test to qualify for Chapter 7. This test compares your income to North Carolina’s median income for your household size. If your income is below the median, you automatically qualify. If it’s above, you’ll need to show that you don’t have enough money left after paying the allowed monthly expenses to pay your debts.
You’ll also need to gather these documents:
- Six months of pay stubs
- Recent tax returns
- Property value records
- Retirement and bank account statements
- Insurance policies
- Personal property lists
Filing Your Bankruptcy Petition
Once you qualify, your attorney prepares and files your bankruptcy petition. This document includes all details about your financial situation. You must be completely honest – hiding assets or providing false information can result in severe penalties.
The petition requires:
- A complete list of your property and its value
- Names and addresses of all creditors
- Amount and type of each debt
- Your income sources and amounts
- Monthly living expenses
- Recent financial transactions
- Property sales or transfers in the last two years
- Recent gifts over $600
- Tax returns for the past two years
The filing fee is $338, but you may qualify for a waiver or payment plan if you can’t afford it. Your case officially starts when the court receives your petition.
Your attorney ensures all forms are correct and properly filed with the Charlotte bankruptcy court. After filing, you’ll get a case number and the name of your bankruptcy trustee.
The Automatic Stay
When you file Chapter 7, an automatic stay takes effect immediately. This legal protection stops most collection actions against you.
The automatic stay:
- Blocks creditor calls, letters, and lawsuits
- Stops foreclosure proceedings
- Prevents wage garnishment
- Halts car repossession
- Stops utility disconnections
- Pauses debt collection lawsuits
Some debts that aren’t affected by the stay are:
- Child support payments
- Criminal proceedings
- Certain tax actions
- Pension loans
If you’ve filed for bankruptcy before, the stay might be limited. The court can also lift the stay if a creditor shows good reason. Your attorney will explain how the stay applies to your specific debts.
Meeting of Creditors
About 30 days after filing, you’ll attend the 341 meeting, also called the meeting of creditors. During this meeting, the trustee and any creditors can ask questions about your finances under oath. The meeting takes place in a small room with others who filed for bankruptcy that day.
You must bring these required documents:
- Government-issued photo ID
- Social Security card
- Recent pay stubs
- Bank statements
- Tax returns
The trustee will call your case, verify your identity, and place you under oath. They’ll ask about your assets, property sales, income, expenses, and debts listed in your petition. Most meetings last only 10-15 minutes. While creditors can attend, they rarely do. Your attorney will sit with you and help explain anything you don’t understand. Being honest and prepared makes this meeting go smoothly.
Financial Management Course
After the 341 meeting, you must complete your second required course – financial management. This course helps you build money management skills to avoid future financial problems.
The course covers:
- Creating a realistic budget
- Managing income and expenses
- Setting financial goals
- Using credit wisely
- Saving for emergencies
The course takes about two hours and can be done online, by phone, or in person. You must finish it before receiving your bankruptcy discharge. Keep your completion certificate – your Charlotte NC bankruptcy discharge lawyer will file it with the court.
The Path to Discharge
If everything goes smoothly, you’ll receive your discharge about 60 days after the creditors’ meeting. This court order releases you from personal liability for most debts.
The discharge will not eliminate:
- Recent taxes
- Student loans
- Child support or alimony
- Court fines
- Debts from fraud
- Most government debts
Creditors cannot try to collect discharged debts. The discharge is permanent – these debts are gone forever. After discharge, you can start rebuilding your financial life without the burden of old debts.
Take Your First Step Today
The Law Office of Jack G. Lezman, PLLC, helps hundreds of Charlotte residents find debt relief through Chapter 7 bankruptcy. As your Chapter 7 bankruptcy attorney in Charlotte, NC, we handle bankruptcy and immigration cases and offer personalized solutions for your unique situation.
We understand taking the first step is hard. That’s why we offer free consultations at our Charlotte office. During your visit, we’ll review your case, explain your options, and help you choose the best path forward.
Don’t let debt control your life any longer. Our Charlotte law office is ready to help you start fresh. Visit us to learn how we can help you achieve financial freedom through Chapter 7 bankruptcy.
