What Are the Debtor’s Responsibilities After Filing Chapter 7 Bankruptcy?
Updated: Mar 19
1. File complete and accurate schedules and statements of financial affairs (covering assets, liabilities, list of creditors, income and expenses). These documents must be filed within 14 days after filing bankruptcy.
2. Pay the filing fee associated with Chapter 7 Bankruptcy. As of the date of this blog post, the filing fee in the Western District of Washington Bankruptcy Court is $335.00.
This fee can be waived if the debtor is below 150% of the poverty level and can demonstrate that the debtor is unable to pay the fee in installment payments over the next 120 days.
If the debtor is not eligible for a fee waiver, the debtor may be eligible to pay the filing fee in via installment payments.
If the installment application is approved, the debtor must make 4 installment payments within 120 days to pay the filing fee.
3. Within 30 days after filing or the date of the 341 creditor meeting – whichever comes first – file a statement of intention as to assets secured by liens by indicating whether the debtor wishes to “redeem”, “surrender” or “reaffirm” such asset (typically a vehicle). The debtor must perform his/her stated intention reflected in the filed form within 30 days after the 341 meeting. My website contains blog posts on what it means to redeem, surrender or reaffirm. It also contains a blog post on reaffirmation strategies.
4. Get the chapter 7 trustee the required documents on time. The Bankruptcy Code requires the debtor to provide the following documents to the trustee at least 7 days before the 341 meeting:
picture identification and proof of social security number (typically driver’s license or SS card. If the debtor can’t find his social security card benefit statements from the SS administration will work);
proof of current income via the most recent pay stub or other documentation to reflect income; copies of account statements (bank, savings, investment accounts) for the period that covers the date the case was filed;
documentation to support expenses if the means test applies (can be bank statements);
copy of the most recent tax return filed by the debtor (if you don’t have a copy you can obtain one from the IRS or obtain a tax transcript). The debtor’s duties with respect to providing documentation are spelled out at Rule 4002 of the Bankruptcy Rules of Procedure.
5. Attend the 341 meeting of creditors. The Bankruptcy Code requires that this meeting be held “within a reasonable time” after the bankruptcy filing. Expect to have your meeting held approximately 45 days after filing. The meeting is required for 2 main reasons: 1) it’s for the trustee to confirm the accuracy of your schedules and other filings with the petition in order to determine if there are any assets the trustee may liquidate for the benefit of unsecured creditors (usually there are none because of the existence of liens against the assets and the availability of exemptions a debtor may claim as to his/her assets); and 2) allow creditors to attend the meeting to ask questions of the debtors. This meeting typically lasts about 5 minutes and is nothing to fear.
Also, the debtor needs to cooperate with the trustee. If the trustee has a question that the trustee feels was raised in the schedules, the debtor may be required to provide supplemental documentation or amend the debtor’s schedules.
6. Take an approved course on financial management and file the certificate of completion with the bankruptcy court. This is a requirement for discharge.
7. Wait for the discharge order. This typically occurs 4-6 months after filing. The discharge is the debtor’s financial fresh start as it wipes out most unsecured debt like credit cards, medical bills, collection lawsuits, etc. Also, this is the typical scenario. Not all scenarios are the same. Complexities not discussed may arise. Generally, the more thorough and complete the debtor’s disclosures, the simpler the bankruptcy process. Disclosure is the golden rule.