Delaware Bankruptcy Chapter 7
Chapter 7 filing is the most common form of bankruptcy. It involves the appointment of a trustee who collects the non-exempt property of the debtor (if any), sells it and distributes the proceeds to the creditors. There usually are no assets to distribute.
In Delaware, you can keep up to $25,000 in assets, and up to $125,000 of equity in your home. For information on exempt property, visit the Exempt Property Page. This form of bankruptcy works well for unsecured debt like credit cards and medical bills. Some debts are non-dischargeable for example, (alimony, child support and most taxes, etc.).
Chapter 7 Basics:
– From filing case to completion takes approximately 3 months.
– As soon as we file you are protected from creditors (stops creditor phone calls, wage attachments etc.).
– You will receive debt relief with no repayment plan.
– In most cases you keep all of your assets (house, car, personal property).
– 99% of individuals who file are issued a discharge.
– Most people hire an attorney due to the complexity of the law.
Chapter 7 Timeline:
1. Free consultation and we decide that Chapter 7 Bankruptcy is best for you.
2. You retain me as your lawyer.
3. I run a credit report and go over everything that I need to file and prepare all the necessary paperwork for your individual circumstances.
4. You take the Mandatory Credit Counseling Course (about 30 minutes online or by telephone). Costs for this course range from approximately $15 to $60.
5. We have a final review and make any changes necessary before you sign documents and get a case number. You now have the umbrella of bankruptcy protection in place and are legally protected from harassment by creditors.
6. The court sets a date for the 341 Meeting where we present paperwork to the trustee. Relax, this is much easier than most people think and takes less than 10 minutes on average. This meeting is held in the J. Caleb Boggs Federal Building, 844 King Street, 3rd Floor Room 3209, Wilmington, DE 19801. There is no Judge as it is not held in a courtroom.
7. Your discharge is usually issued in 60 days from the date of your 341 meeting.
8. You must complete an “FMC” – Financial Management Course within 45 days of the 341 meeting.
9. The court checks that all documents are true and the Judge signs the discharge approximately 60 days after the 341 meeting.
10. Congratulations! Your debts are legally discharged. It rarely happens, but if any creditors contact you after your discharge, contact me immediately. I handle this problem for free for my clients.