Once you’ve confirmed that you qualify for Chapter 7 bankruptcy under the means test, you need to next consider whether you have any exposed equity in your assets. Exposes equity is what a Chapter 7 trustee looks for when determining whether they must sell a Chapter 7 debtor’s assets. For example, a couple who file Chapter 7 bankruptcy, and who own their home, and who have a mortgage balance that is less than the value of their home, and who don’t have enough exemptions to protect that value, may have their home sold by a Chapter 7 trustee to realize the nonexempt equity in their home. That equity is then used to pay the Chapter 7 trustee’s fees, and the fees of their professionals, and then the balance is distributed to the couple’s creditors.
Once you’ve confirmed that you have no exposed equity at risk of sale by a Chapter 7 trustee, you must then complete credit counseling. Credit counseling can be taken online and is a fairly simple course. None of the information that you provide to the credit counseling provider is provided to the Bankruptcy Court. When you complete credit counsel, you receive a credit counseling certificate.
Once you’ve completed credit counseling, you must review and sign your Chapter 7 bankruptcy petition. Once completed, your attorney will electronically file the Chapter 7 petition with the Bankruptcy Court. Note that it’s crucial that your Chapter 7 petition be filed with the correct Bankruptcy Court corresponding note only with your state, but also with your county.
Once your Chapter 7 petition has been filed with the correct Bankruptcy Court, you will receive a case number, and the Bankruptcy Court will assign a Chapter 7 trustee to your case. The Chapter 7 trustee will oversee your case, and will likely request additional documents and information in order to fully review and understand your petition and your case as a whole.