The intent of the Bankruptcy Act of 2005 was to produce a national decrease in the filing of bankruptcies. Recently, affected by the economy, the number has begun to climb. This pertains, in particular to specific types of bankruptcies. Of the overall total between the end of September 2012 and the end of September 2013, the total number of bankruptcies in DC was 855. Of this amount, some 696 were Chapter 7 Bankruptcies. These as a Chapter 7 Bankruptcy, a lawyer in Washington DC would insist, this is a popular type.
In fact, if you wish to apply for bankruptcy in Washington, a lawyer would most likely advise you to opt for Chapter 7. While a debtor must give up a certain amount of property beyond the exemptions, he or she can then have all debts formally and legally discharged. With a Chapter 7 Bankruptcy a debtor is able to start over, free from debt with a clean slate.
Defining Chapter 7 Bankruptcy
This type of bankruptcy is described as “straight.” It is also referred to as a “liquidation” bankruptcy. Both terms are clearly applicable. Chapter 7 is straightforward consumer bankruptcy and actually is the simplest of all the different types of bankruptcy. It does require the debtor to sell of both personal items that exceed the limits of exemptions and non-exempt property in order to pay off creditors.
Initial Steps
If you decide upon Chapter 7, you will need to follow a specific pattern. After talking to a lawyer, you will need to:
- Enroll in an accepted consumer credit course
- Provide and prepare the necessary documents
- File the petition for Chapter 7 Bankruptcy
After these steps are taken, an automatic stay halting all contact with creditors from contacting you will go into effect. They cannot speak or get in touch with you until the “meeting of creditors” takes place.
The Meeting of Creditors
A Chapter 7 bankruptcy lawyer in Washington DC will tell you that very few creditors actually will attend the meeting. Generally it is the creditor, his or her lawyer, and the court-appointed trustee. This meeting will verify the information the creditor supplied.
Next Steps
The creditor will follow up this meeting by enrolling in a course in managing personal finances. Upon completion, the creditor will then have to wait for a few weeks (6-8) before further action will occur. At that point, the trustee may elect to discharge all the creditor’s debts. This essentially wipes the individual’s financial slate clean permitting him or her to get on with life.
In order to make it successfully through the process, a creditor will need a Chapter 7 Bankruptcy lawyer. Washington DC boasts several with expertise in this field. With a choice of several qualified law firms, make sure you take your time to select the right one.
