Title 11

• Title 11 is the Bankruptcy code of the United States. This code contains federal laws by which all bankruptcy proceedings must abide. Title 11 comprises several chapters such as Chapter 7 (liquidation bankruptcy) and Chapter 11 (reorganization bankruptcy).
  
  

Bankruptcy

• Bankruptcy is a legal action in which a person or a business takes when they cannot pay the debts they owe. Most debtors (people or businesses that owe money) who file bankruptcy will either be scheduled a payment plan to pay off their debts or have most or all of their debts eliminated. Bankruptcy protects the debtor by legally ordering creditors (people or businesses that lend money) to stop collection attempts, repossessions, garnishments, foreclosures and law suits. This protection is known as the automatic stay. There are four different types of bankruptcy filings. A Chapter 7 bankruptcy is the most common type and is mainly filed by individuals or married couples.
  
  

Chapter 7

• In a Chapter 7 bankruptcy, you give all your non-exempt assets (personal property that can be sold to pay creditors) to a court appointed trustee (a person who manages bankruptcy cases). The trustee will sell these assets and divide the earnings among the creditors. This process is called liquidation. In most Chapter 7 bankruptcy cases, all assets are exempt (cannot legally be used to pay creditors) and there will be no loss of property. You will then be discharged from most or all of your debts. You will not have to repay any debts that have been discharged. However, some debts such as child support and student loans cannot be discharged.
  
  

Chapter 7 Filing

• To file for a Chapter 7 bankruptcy, you will need to file a petition with the bankruptcy court. You will also be required to file a report of your current income and a statement of financial affairs that list all your debts and assets (valuable property). If you are married and both you and your spouse are in debt, you can file either individual petitions or a joint petition. Fees will be charged for filing a petition, but these can be paid in four or less installments. If you earn an insufficient income, you may not have to pay for these fees.
  
  

341 Meeting And Discharge

• After filing for a Chapter 7 bankruptcy, you will be required to attend the 341 meeting (the meeting of creditors). In this meeting, the court appointed trustee will ask you questions under oath about your assets. Creditors are asked to attend this meeting, but many do not. Creditors are able to ask questions under oath as well. After this meeting, the trustee will sell all your non-exempt assets and divide the funds between the creditors. To receive a discharge, you are required to complete a financial education class. This class can be taken online and a certificate is awarded upon completion. The court will order a discharge of debt (the debt no longer needs to be repaid) approximately 60 days after the 341 meeting. The discharge will be awarded approximately three to six months after the bankruptcy filing.