Chapter 7 Bankruptcy: 
Eligibility, Process & Other Information

Under the 2005 bankruptcy law, in order to be eligible to file Chapter 7, you must pass the Means Test. The Means Test is a complicated formula which is based on your income. Usually, individuals are eligible to file if their net income is fully used up with regular monthly living expenses, thereby leaving no money for payment of debts. When you meet with attorney Susan E. Rizos, she will perform a complete Means Test analysis to make a determination if you qualify for a Chapter 7. Sometimes, due to the complex nature of the formula, individuals with high incomes and a lot of debt "pass" the Means Test while some people with much lower incomes do not. To determine if you are eligible to file, it is recommended that you meet with an experienced bankruptcy attorney who is familiar with the Means Test.

Often, many people file and are able to keep their homes, cars and bank accounts. However, the values of these assets which a debtor keeps, are limited, by law. At your initial consultation, the attorney will ask you a series of questions designed to highlight any possible issues in your case, review your financial history and determine if you are a candidate for Chapter 7.

Upon retaining the office, you should stop screening your calls and advise the creditors and collectors that are calling you at home and at work that you have retained an attorney. Give them our name and address. Usually, the creditors will call the office to verify that you have in fact hired counsel to represent you and upon receiving such verification, back off to give you a chance to file your case.

Prior to filing your case with the Court, you will be required to take a Credit Counseling class and receive a Certificate certifying that the course has been completed. Without this Certificate, your case cannot be filed. This course can be completed online or by telephone at your convenience. The Law Office of Susan E. Rizos, refers all of our clients to the Institute for Financial Literacy which is an approved credit counseling agency. As the date for filing your case approaches, we will contact you about completing this necessary step.

Once your case is filed with the Court, it is illegal for creditors to contact you or to continue any collection efforts including lawsuits against you. If creditors continue to contact you, they are breaking the law and you can sue them for damages.

After the case is filed, you will usually have one Court appearance, called a Meeting of Creditors which is held about a month or so later. If you reside in Brooklyn, Queens or Staten Island, this appearance will be held in downtown Brooklyn. If you reside in the Bronx or in Manhattan, this appearance will be in lower Manhattan.

At that appearance, the Trustee (an experienced bankruptcy attorney appointed by the Department of Justice), assigned by the Court to your case will question you under oath about the information contained in your bankruptcy papers. Creditors have the right to appear and ask questions, but don't usually appear. Recent unusual credit card activity, however, may prompt a creditor's appearance. Sometimes a Department Store may have a representative present to ask if you want to keep your card, in exchange for paying back a portion of your old bill.

Following that Court appearance, creditors as well as the US Trustee have sixty days to object to your case if they believe they have grounds, under the law, to do so. During this period of time, you will need to complete a second credit course called Debtor Education or Financial Management. Again, this course must be given by an accredited agency and the Certificate must be received and filed with the Court in order for you to receive your discharge. The Institute for Financial Literacy offers this course to our clients online and by telephone for your convenience.

If no objections are filed, and your Debtor Education Certificate is timely filed, approximately four months after your case is filed, you will receive in the mail a document entitled "Discharge of Debtor." The Discharge means that you are no longer obligated to repay the debts listed in your bankruptcy. However, not all debts are discharged. For example, certain taxes, most student loans, child support and alimony obligations, debts incurred due to driving while intoxicated, debts deemed not dischargeable in a prior case, government fines and Court order restitution, Court fees, etc. remain valid.

The legal fee you pay to the Law Office of Susan E. Rizos, includes all meetings and calls with you to obtain the necessary information to file your case, the filing of your papers with the Court, appearing with you at the first Meeting of Creditors, notifying you of any objections filed, reminding you of Court appearances, reminding you to do your credit counseling, arranging for the credit counseling and debtor education and advising you of your Discharge. As long as you provide the office will all requested information and truthfully answer all questions and submit accurate documentation, the Law Office of Susan E. Rizos will make sure your bankruptcy is a relatively painless process.

Many clients are concerned about whether they will have a financial life after bankruptcy. The answer is yes. A Chapter 7 bankruptcy will remain on your credit report for ten years. In addition, the debts listed in your case will also appear on your credit report, with the notation "discharged in bankruptcy". It is often the case that a person coming out of a bankruptcy re-establishes their credit faster than a person who is a consistent slow payer or who simply ignored their debts and allowed them to be charged off.

Upon completion of your case, you will be given written instructions which outline a plan for you to rebuild your credit quickly and easily. In addition, it is possible to qualify for an FHA mortgage loan two years after your bankruptcy is discharged (12 months after a Chapter 13). So, do not worry - there is financial life after bankruptcy.

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