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The information contained within the Iowa Northern Pro Se Information Center is accurate as of the date of publication, but it should not be cited or relied upon as legal authority. This information is provided solely as an overview to the bankruptcy process, and should not be used as a substitute for reference to the United States Bankruptcy Code (title 11, United States Code), the Federal Rules of Bankruptcy Procedure, or to local rules or standing orders of this court. Finally, the information contained within this site should not substitute for the advice of competent legal counsel.
Chapter 7 is referred to as the "liquidation" chapter. In a Chapter 7 bankruptcy case, a case trustee is assigned and becomes responsible for gathering and selling the debtor's nonexempt property. The case trustee then uses the proceeds from the sale of these assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Therefore, be aware that the filing of a petition under Chapter 7 may result in the loss of property.
To commence your Chapter 7 case you will need to file a Chapter 7 petition and pay the appropriate filing fee. A Chapter 7 filing is a package of documents (including the petition itself and numerous documents in support of the petition). Make sure you have chosen the correct forms for your case. To visit the Iowa Northern Forms page, click here.
Read the instructions carefully before you complete the forms. Make sure that all of the required information is attached to the forms and documents. (See the checklist for the chapter you are filing under to make certain that you have all the required forms/documents.) Make photocopies for your own records and keep them in a folder that you can find easily.
Be prepared to pay the required filing fees at the time you file the papers. (Note: Only certain forms of payment are accepted. No personal checks or credit cards are accepted.)
NATIONAL GUARD AND RESERVISTS DEBT RELIEF ACT OF 2008
The National Guard and Reservists Debt Relief Act of 2008 provides a temporary exclusion from the bankruptcy means test for National Guardsmen and Reservists called to a minimum of 90 days active duty or homeland defense activity after September 11, 2001. The amendments to Section 707(b)(2)(D) of the Bankruptcy code apply only with respect to cases commenced under Title 11 of the United States Code in the 3 year period beginning on the effective date of this Act.
Form B122A-1Supp would be used for qualifying debtors to invoke the exclusion.
The temporary exclusion expires 540 days after the debtor is released from active duty or is no longer performing homeland defense activities.
To ensure proper case processing timeliness and appropriate noticing by the clerk, debtors and/or their attorneys are required to inform the court immediately upon the release of the debtor from active duty/homeland defense activities. To facilitate compliance with this requirement debtors are required to file a Notification of Release From Active Duty. This form may be accessed by clicking here.
Key Terms and Concepts in a Chapter 7 Case
Automatic Stay - The filing of a petition under Chapter 7 acts as an automatic stay (stop) to most collection actions against the debtor or the debtor's property. However, filing the petition does not stay certain types of actions, and the stay may be effective only for a short time in some situations. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, garnish your wages, or even place telephone calls demanding payments from you.
Bankruptcy Estate - Immediately upon the commencement of a bankruptcy case (filing of your petition), a bankruptcy "estate" will be created. The estate becomes the legal owner of all the debtor's property. Property may be exempted from the estate by the debtor(s) or abandoned by the trustee. Generally speaking, the debtor's creditors are paid from nonexempt property of the estate.
Asset/No Asset - Chapter 7 bankruptcy cases are categorized by the extent to which the assets of the bankruptcy estate would repay the creditors. If all the debtor's assets are exempt or subject to valid liens, normally the case will be categorized as "No Asset." (Within the Northern District of Iowa, all Chapter 7 bankruptcy cases are initially opened as No Asset.) The bankruptcy trustee, will determine if there are assets to be distributed. If so, the Clerk of Court will give creditors a notice of the deadline to file claims you may owe to them.
Meeting of Creditors - Between 21 and 60 days after the petition is filed, the case trustee will hold a meeting of creditors. During this meeting, the trustee will put you (the debtor) under oath, and both the trustee and creditors may ask questions. You are required to attend the meeting and answer questions regarding your financial affairs and property.
Discharge - The discharge releases individual debtor(s) from personal liability for most types of debts and prevents the creditors owed those debts from taking any collection actions against the debtor. In most cases, unless a complaint objecting to the discharge has been filed the bankruptcy court will issue a discharge order between 60 to 90 days after the date first set for the meeting of creditors. The entry of the discharge is what gives debtors a "fresh start."