Following the filing of Chapter 7 Murrieta, the Court will convene a meeting of all creditors within 40 days. The debtor is required to attend and is placed under oath by the trustee. The creditors are then allowed to ask questions of the debtor regarding their finances and property owned. If the debtor is married, both spouses must attend this session. This session is not only intended to allow creditors to gather information, but also to make sure the debtor understands the consequences of completing a bankruptcy and that they understand the alternatives to Chapter 7 bankruptcy. These alternatives could include both filing under a different chapter and non-bankruptcy options such as negotiating a payment plan.
Once this process is complete, it is the debtor’s choice alone as to whether and how to proceed as long as they meet the minimum statutory requirements. If the debtor continues with Chapter 7 Murrieta the next step will be a report compiled by the trustee. The trustee will review the financial information provided by the debtor and make a lists of assets subject to claim by creditors. If there are assets available, private creditors will be required to submit proof of their claims within 90 days and government creditors will be required to submit proof of their claims within 180 days.
Once all claims are filed, the debtor’s nonexempt property will be transferred into an estate. Property not subject to a lien will be sold off in a way that seeks to maximize the money returned to the non secured creditors. Additionally, the trustee may seek to reverse certain repayment arrangements made with creditors in the period shortly before bankruptcy filing and return that money to the estate pool. If the debtor is a business, the trustee may also seek to operate the business for a short period of time if this operation will help in liquidating the estate.
Once this process is complete, the debt is discharged. Even if the creditors were not paid off in full, they are no longer allowed to seek repayment of the debt. The debtor begins again with a clean slate and can begin the process of restoring their credit.
