Boston Bankruptcy Attorney

Chapter 7 Bankruptcy: Exempt Assets

Filing for Chapter 7 Bankruptcy is a complicated process, which begins when the debtor files an official petition, a schedule, and a Statement of Financial Affairs with the bankruptcy court. In order for the bankruptcy forms to be complete, the debtor must:

• Provide a complete list of all creditors
• Provide a list of the amount types of creditors’ claims
• Disclose the source, amount, and frequency his/her income
• Provide a list of all his/her property
• Provide a detailed list of his/her monthly living expenses.

The "Automatic Stay"

Once a bankruptcy petition has been filed, all creditors must stop trying to collect on debts. These collection calls are prevented by an "automatic stay." The stay is designed to preserve property and to give the debtor a break from dealing with creditors.

During an initial hearing, a bankruptcy trustee is given control over the debtor’s financial affairs. Typically between 20 and 40 days after the bankruptcy petition is filed, the assigned trustee will hold the “first meeting of creditors.” The debtor must be present for this meeting, which is frequently called a 341 meeting. The trustee is allowed to ask the debtor questions, under oath, about the property and debts. Creditors can also question the debtor.

After a hearing, a creditor must show the bankruptcy judge that there is “cause” for the creditor to be allowed to continue with the collection action. One reason frequently used is that the property might deteriorate in value during the bankruptcy period.

Non-Exempt Property

If there is property that is not exempt from bankruptcy, the trustee takes control of it. Through the sale of property, the trustee pays the expenses of the administration of the case and then distributes remaining money to creditors who hold allowed claims. This is done according to the priority of the claims. Any wages that are earned after a case is filed are the debtors’. These wages are beyond the reach of creditors who had claims on the date the bankruptcy petition was filed.

Contact a Boston Bankruptcy Lawyer

If you are considering filing for bankruptcy and need some assistance determining if this is the correct step for you, contact the Boston bankruptcy lawyers of Joshua Spirn & Associates at 1-800-975-5346 to discuss your case.