When an individual decides to file Chapter 7 bankruptcy , they will need to work closely with their bankruptcy attorney to gather and complete all of the necessary paperwork that comprises the bankruptcy petition. The petition is then filed with the bankruptcy court in the debtor’s district where they reside. The bankruptcy petition discloses the debtor’s personal and real property, their income and expenses, as well as debts and property transactions. The bankruptcy court will appoint a person called a Trustee who will be assigned to oversee the case and will be in charge of the debtor’s assets during the bankruptcy case. The trustee must be licensed as an insolvency practitioner and should be registered under the United States Bankruptcy Act. During the Chapter 7 bankruptcy the trustee receives all of the debtor’s non-exempt property and/or assets, generates and manages the funds from the sale of those assets, pays any related expenses, and finally disburses the remaining funds to the listed creditors. However, with the help of an experienced bankruptcy attorney, rarely does an individual lose property or assets in a Chapter 7 bankruptcy filing.
Approximately 30 days after the case is filed, the debtor and their bankruptcy attorney will attend the “meeting of creditors”. The trustee has already had an opportunity to review the debtor’s petition. The trustee will verify the debtor’s identity and have the chance to ask a few basic questions regarding the bankruptcy case. Despite the name, creditors rarely attend this meeting unless fraud was suspected on the debtor’s part. The meeting typically only lasts a few minutes as long as the petition is in order. Again this is where it is invaluable to have the help of an experienced bankruptcy attorney to ensure that there are no errors.
A couple of months later the debtor should receive their notice in the mail from the court that “all debts that qualified for discharge were discharged”. In a nutshell, a Chapter 7 trustee acts as an officer of the court to ensure that the debtor’s and the creditor’s interests are not only protected, but administered in accordance with the federal bankruptcy laws.