Due to the recent economic problems and the slow rate of economic recovery, people from all over the country, and even here in Texas, may find it difficult to reorganize their finances and get their lives back on track. Financial pressure may culminate in different kinds of debt like rent, unpaid credit card bills and loan repayments. In order to give people a second chance at recovery, avoid creditor harassment and protect their assets, Chapter 7 bankruptcy can be a viable solution.
Broadly speaking, a debtor needs to primarily file the petition with a bankruptcy court which serves the debtor’s area of residence. Along with the petition, the debtor is also required to file a statement of current income and expenditures and a schedule detailing all assets and liabilities. Additionally, the debtor must also file a statement of financial affairs and schedule detailing executor contracts and unexpired leases.
Unlike organizations that file for Chapter 7 bankruptcy, individual debtors who are primarily looking to have consumer debts discharged need to file additional documents. They must, in their filing, include a statement of monthly income containing details, if any, of expected growth in income and expenses. Moreover, they are also required to submit a certificate of credit counseling with a copy of a debt repayment plan in case one has been developed during the course of counseling.
While filing for Chapter 7 bankruptcy, the debtor needs to pay $254 towards filing fees and an additional $15 as a trustee surcharge and $75 towards administrative fees. Generally, this amount must be paid in full to the court clerk during filing. However, at the court’s discretion, a debtor may be allowed to pay the amount in four installments with the final payment being made no later than 120 days from the date of filing.
Source: United States Courts, “Liquidation Under the Bankruptcy Code,” accessed on Feb. 26, 2015