The
summary & checklist below is provided as a courtesy
by our office to help you gather
documents for your bankruptcy case
There is a
misconception among the public that they can no longer file
a chapter 7 bankruptcy. Although the recent bankruptcy
reform law which went into effect on October 17, 2005,
greatly changed existing bankruptcy laws, it did not repeal
the bankruptcy protection system in the United States. A
summary of the new law and its requirements are set forth
below:
1. You must also attend a Pre-Bankruptcy Debt Counseling
and file proof of completion before your case is filed. You
must also attend a Financial Management course after your
case is filed and provide the court with proof of
completion before your debts can be discharged. You enroll
in both courses at www.startfreshtoday.com. You can also
find a list of approved providers here. Please
download the Start Fresh
Today Pre-filing Credit Counseling Briefing. This manual
will explain in easy step-by-step directions how to
obtain your bankruptcy counseling.
2. You must gather
all your current credit card bills, collection letters,
lawsuits, credit reports, utility bills, home mortgage
statements, car payment bill, and any other documents that
show a debt owed to you to any other person. Your attorney
will need these documents in order to prepare your
bankruptcy papers.
3. Get a free copy of your three-bureau credit report
from annualcreditreport.com. You can also
call 1-877-322-8228
and request a free copy of your credit report by phone.
You will have to provide your social security number,
address, date of birth and zip code in order to obtain
your free credit report by mail.
3.
Get copies of your check stubs for the past 6 months from
your employer(s). You must have each and every check stub
for the previous 6 month before the date of filing of your
case without any gaps in the dates. In order to do the
calculations to determine if you qualify under the new
bankruptcy law, you will have to provide full 6 months of
check stubs.
4. A copy of your most recent federal tax return or tax
transcript. You can obtain a tax transcript from the IRS by
faxing them the required form IRS 4506t. Directions to
get your transcript are provided in the checklist below.
If you don't have a tax return for the most recent tax
period, a declaration signed by you attesting to that
fact should satisfy the court of the requirement to
provide a recent tax return.
5. Pass the "Means
test". This is the
most complicated part of your case. You can read the
following, which may be too technical at this time to
understand. This test will determine if you qualify for
a chapter 7 bankruptcy. If you have more income than the
test will allow or if you are deemed to be abusing the
bankruptcy system, then your case will be dismissed
unless you agree to pay a portion of your debts under a
chapter 13 plan. You can use our free means test
calculator page to see if
you qualify for a chapter 7 bankruptcy. There are two
tests that are applied to your income to see if you
qualify under this test:
Median Income Test: Under this test, if your Current
Monthly Income is below the the median income in your
state, then there is no presumption of abuse and you
qualify for a chapter 7 bankruptcy. If your income is more
than the state median income, you must go to the second
part of the test. The median income information for your
State is provided by the IRS. Below is the
median income for California:
* add $6300 for each
person in excess of 4
If your current
monthly income is greater than your State's median income
level for your family size, the second part of the test
looks to see if your income reduced by the IRS allowed
monthly expenses for a certain family size exceeds a
certain amount. The IRS allowable expenses can be
found here.
So, if your current monthly income is more than the State
Median Income, but your current monthly excess income is
less than the amount allowed under the Mean's Test, you
qualify for a chapter 7. If your current monthly income is
more than your State Median Income and your excess income
is greater than the amount allowed under the Mean's Test,
your case will be presumed abusive and dismissed unless
there are special circumstances in your case or unless you
agree to repay a portion of your debt under a chapter 13
plan.
Once
your case is electronically filed with the Court, you will
receive official notification of your meeting of creditors
date. The meeting of creditors is usually 30 to 40 days
after the initial filing of the bankruptcy petition.
The meeting of creditors is called that because creditors
have the chance to attend the meeting and ask you questions
regarding their debt. You have an obligation at that point
to answer their questions under oath. Creditors rarely show
up at the meeting of creditors and as a result you will
only be questioned by the bankruptcy trustee for a few
minutes and then dismissed.
The bankruptcy trustee is appointed by the Court to oversee
your case. Her job is to find non-exempt assets which you
may own, sell them, and pay your creditors a certain
percentage of their debt from the proceeds of the sale. If
she determines that you have no non-exempt assets, she will
send a report to the court stating that you have no assets
to liquidate. The court will then grant you a discharge and
close your case.