Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts. This type of bankruptcy can generally be described as liquidation or a consumer’s bankruptcy. Under a Chapter 7 bankruptcy, the petitioner asks the bankruptcy court to wipe-out (discharge) the debts owed. Chapter 7 is generally the simplest and quickest form of bankruptcy and is available to individuals, married couples, corporations and partnerships.
The petitioner is required to list all his property and debts in his bankruptcy schedules without exception. The judge can also deny a petitioner’s discharge if the court determines the petitioner has done something dishonest in connection with his bankruptcy case, such as destroy or hide property, falsify records, or lie or disobeys a court order.
Although it is possible to lose property in a chapter 7 bankruptcy, this almost never happens because:
- The petitioner almost never has much property to lose.
- California has a high “Wild Card” exemption allowing one to keep most, if not all, of their assets.
- California has a high “Homestead” exemption allowing one to keep most if not all of the equity in their residence.
- An experienced attorney will assist the petitioner in keeping property. In most consumer cases, all the assets are exempt, and therefore there are no assets to liquidate and there is no dividend to creditors.
The following is a general time-line typical for Chapter 7 bankruptcy;
- You complete the Bankruptcy Questionnaire (an in-house form) either at home or at the offices of Mentis Law Group with legal staff assistance.
- Once we have received payment in full and the completed questionnaire with necessary documents, the bankruptcy petition is prepared. It will take 10 to 14 days to prepare your petition, unless we do the bankruptcy on an emergency basis.
- You complete the first of two 1-½ hour credit counseling courses online or by telephone.
- You and possibly your spouse (if you have filed jointly) must go to Mentis Law Group’s office to sign the petition. You will not need an appointment and the whole process will take about an hour.
- Mentis Law Group will file your petition electronically with the Bankruptcy Court.
- Within 48 hours of filing the petition, Mentis Law Group will notify you of the petition filing date, your bankruptcy case number, a copy or your petition, a map to the court house and a brochure published by the bankruptcy court.
- Within seven days of filing the Petition, Mentis Law Group will inform you of the 341(a) hearing date in writing or by e-mail. You will also receive a separate notice of the 341(a) hearing date directly from the Bankruptcy Court. In addition, you will receive a Notice of Deficiency from the Bankruptcy Court regarding the requirement to complete the post-petition credit-counseling course. You do not need to respond to this notice or sign any documents. Further, you will receive by mail solicitation from outside credit-counseling agencies to complete the post-petition second credit-counseling class. Please ignore this solicitation as you have already paid for this service. The 341(a) hearing will take place approximately five to six weeks after the petition filing date.
- Take the second credit-counseling course. Mentis Law Group’s staff will remind you of this step. Once you have completed the course, Mentis Law Group will be notified of the certificate. Mentis Law Group will then send the certificate of completion to you for your signature, which you must return to our office. This office will then file this document with the Bankruptcy Court. Failure to complete this step will result in an unsuccessful filing (a dismissal) of your petition.
- You will receive your discharge within approximately four months.
A Chapter 7 bankruptcy process will take approximately five months from the time your petition is filed with the Bankruptcy Court, to the time Mentis Law Group and you each receive your Notice of Case Discharge by U.S. Mail.
For more information about filing a Chapter 7 bankruptcy, please visit our Chapter 7 FAQ page.