Your Duties As A Debtor In A Chapter 7 Bankruptcy Case

Your Duties As A Debtor In A Chapter 7 Bankruptcy Case

By |May 15th, 2013|

chapter 7 bankruptcy debtor responsibilitiesIn bankruptcy, you’re faced with a laundry list of duties. Ignore them at your peril.

Making the decision to file for bankruptcy isn’t easy.

You’re poring over options, looking to solve your problem in the best way for you.

You’ve probably talked with a bunch of lawyers to find someone who knows the ropes and with whom you feel the most comfortable. Finally, you decide that Chapter 7 is the way to go.

Now dig in – you’ve got things to do.

Before Your Case Is Filed

A bankruptcy filing consists of a full-blown inventory of everything you own, everything you owe, and a fairly comprehensive detail of your finances over the past months and years.  We’ve talked about the documents you need to get your bankruptcy filing in order, so consider that as part of your responsibilities.

Beyond that, remember that you need to get your credit counseling certification done. Yes, the process is a gigantic waste of time – but I don’t make the rules, I just play by them.

Your Duties As A Debtor In Chapter 7 Bankruptcy

Now that you’ve done the legwork to get your documents together, you’ve got to file your Chapter 7 case and live up to your duties under the U.S. Bankruptcy Code. There is a dizzying list of the things you’ve got to do.

When you file your bankruptcy case, you must file the following documents:

  • a list of creditors, schedule of assets and liabilities; schedule of current income and current expenditures, and a statement of financial affairs;
  • a certification that you’ve received and read the notices required under the law;
  • copies of all payment advices or other evidence of payment received within 60 days before the date of the filing of the petition, by you from any employer;
  • a certificate from the approved nonprofit budget and credit counseling agency that provided you with the required pre-bankruptcy credit counseling session, as well as any repayment plan proposed during that session;
  • a record of any interest that you have in an education individual retirement account or under a qualified State tuition program;
  • a statement of the amount of monthly net income, itemized to show how the amount is calculated; and
  • a statement disclosing any reasonably anticipated increase in income or expenditures over the 12-month period following the date of the filing of the petition.

If you have any secured debts, then:

  • within thirty days after your bankruptcy case is filed (or on or before the date of the meeting of creditors, whichever is earlier) then you must file a statement of intention with respect to whether you’re going to keep the property that’s secured by the debt or give it up; and
  • within 30 days after the first date set for the meeting of creditors, perform your intention with respect to the secured property.

Your Duties With Respect To The Bankruptcy Trustee

As you know, there’s a trustee appointed in every Chapter 7 bankruptcy case. You’ve got duties with respect to your dealings with that person, as well. Some of those duties include:

  • cooperate as necessary to enable the trustee to perform the trustee’s duties;
  • surrender all property of the estate and any recorded information, including books, documents, records, and papers, relating to property of the estate;
  • appear at the meeting of creditors held by the trustee, as well as any follow-up meetings;
  • not later than 7 days before the date first set for the first meeting of creditors, provide to the trustee a copy of the Federal income tax return for the most recent tax year ending immediately before the commencement of the case and for which a Federal income tax return was filed;
  • document your identity, including a driver’s license, passport, or other document that contains your photo.

If You Don’t Play By The Rules

The rules of filing Chapter 7 bankruptcy are simple: play by them or go home.

A failure to live up your responsibilities and fulfill your duties will lead to dismissal of your bankruptcy case.

Some failures trigger and automatic dismissal.

Others occur only when the trustee or some other party to your bankruptcy makes a motion and a request to the judge.

Avoid the problem of dismissal by doing what you need to do. No excuses.

You need to do your job and the trustee needs to do his job. The trustee wants you to get a discharge. But the trustee wants to liquidate your non-exempt assets so that your creditors get a fair distribution and so the trustee gets paid for his efforts.

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About the Author:

I've been a consumer protection lawyer since 1995, working to help people end their bill problems. I'm a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.