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LAW for ALL Seventeenth Edition OCTOBER 2011 Editor KATHLEEN MICHON Cover Design JALEH DOANE Production TERRI HEARSH Proofreading SUSAN CARLSON GREENE Index THÉRÈSE SHERE Printing BANG PRINTING Elias, Stephen. How to fi le for Chapter 7 bankruptcy : by Stephen Elias, Albin Renauer & Robin Leonard. — 17th ed. p. cm. Includes index. Summary: “Guides readers through the bankruptcy process, explaining bankruptcy law requirements and providing line-by-line instructions for fi lling out the necessary forms. e 17th edition includes Supreme Court cases on and interpretations of the new bankruptcy laws, and provides updated forms, instructions and state and federal exemption tables.”—Provided by publisher. ISBN 978-1-4133-1633-9 (pbk.) — ISBN 978-1-4133-1646-9 (epub e-book) 1. Bankruptcy—United States—Popular works. I. Renauer, Albin. II. Leonard, Robin. III. Title. KF1524.85.E4 2011 346.7307’8—dc22 2011017135 Copyright © 1989, 1990, 1991, 1993, 1994, 1995, 1996, 1998, 1999, 2000, 2001, 2002, 2004, 2005, 2006, 2007, 2008, 2009, and 2011 by Stephen Elias and Nolo. All rights reserved. e NOLO trademark is registered in the U.S. Patent and Trademark Offi ce. Printed in the U.S.A. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without prior written permission. Reproduction prohibitions do not apply to the forms contained in this product when reproduced for personal use. For information on bulk purchases or corporate premium sales, please contact Please note We believe accurate, plain-English legal information should help you solve many of your own legal problems. But this text is not a substitute for personalized advice from a knowledgeable lawyer. If you want the help of a trained professional—and we’ll always point out situations in which we think that’s a good idea—consult an attorney licensed to practice in your state. Dedications To Mom and Dad, who gave me what money can’t buy, and to whom I’m forever indebted. —A.R. To everyone who uses this and other Nolo books, for their courage and for having the good sense to take the law into their own hands. —S.R.E., R.L., and A.R. Acknowledgments For their support and creative contributions to the early editions of this book, the authors gratefully acknowledge the following people: Jake Warner, Mary Randolph, Terri Hearsh, Toni Ihara, Lisa Goldoftas, Marguerite Kirk, Susan Levinkind, Mike Mansel, Kim Wislee, Jess Glidewell, Les Peat, Lee Ryan, Marian Shostrom, Bobbe Powers, Virginia Simons, Ella Hirst, Leslie Kane, Deanne Loonin, and the late A. Richard Anton and Jim Snyder. e more recent editions would not have been possible without the superb editorial assistance of Lisa Guerin. And special thanks to Kathleen Michon for not missing an editorial beat on this latest edition. anks for being there. About the Authors Stephen Elias has been a lawyer since 1970. He spent ten years doing legal aid work in California and New York and as a public defender in Vermont’s Northeast Kingdom. During the next 20 years, Steve wrote and edited more than 30 Nolo books dealing with bankruptcy and other legal topics. Steve currently makes his home and practices bankruptcy law in a small northern California town. Steve writes Nolo’s popular Bankruptcy & Foreclosure Blog at blog.nolo.com/bankruptcy, and is a member of the National Association of Consumer Bankruptcy Attorneys. Albin Renauer received his J.D. in 1985 from the University of Michigan Law School, where he served on the Michigan Law Review. He worked for various public interest law firms, the California Supreme Court, and Nolo before launching LegalConsumer. com, a website that helps people determine whether or not they’re eligible for bankruptcy. Robin Leonard graduated from Cornell Law School in 1985. She is the author of Nolo’s Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time; Solve Your Money Troubles: Debt, Credit & Bankruptcy; and Credit Repair. Table of Contents Your Chapter 7 Bankruptcy Companion 1 1 Should You File for Chapter 7 Bankruptcy? 5 Bankruptcy in America: e Big Picture 7 An Overview of Chapter 7 Bankruptcy 9 Who Can File for Chapter 7 16 Does Chapter 7 Bankruptcy Make Economic Sense? 23 Alternatives to Chapter 7 Bankruptcy 29 2 e Automatic Stay 37 Actions Prohibited by the Stay 38 When the Stay Doesn’t Apply 40 Evictions 42 3 Your Property and Bankruptcy 45 Property in Your Bankruptcy Estate 46 Property at Isn’t in Your Bankruptcy Estate 54 Property You Can Keep (the Exemption System) 56 Selling Nonexempt Property Before You File 68 4 Your House 73 How Bankruptcy Affects a Typical Homeowner 74 If You’re Behind on Your Mortgage Payments 76 Will You Lose Your Home? 83 Ways to Keep Your House 93 5 Secured Debts 97 What Are Secured Debts? 99 What Happens to Secured Debts When You File for Bankruptcy 101 Options for Handling Secured Debts in Chapter 7 Bankruptcy 103 Choosing the Best Options 114 Step-by-Step Instructions 118 6 Complete and File Your Bankruptcy Paperwork 139 Gather the Necessary Documents 141 Get Some Information From the Court 144 For Married Filers 145 Required Forms and Documents 148 Form 1—Voluntary Petition 151 Form 6—Schedules 159 Form 7—Statement of Financial Affairs 204 Form 8—Chapter 7 Individual Debtor’s Statement of Intention 217 Form 21—Statement of Social Security Number 221 Form 22A—Statement of Current Monthly Income and Means-Test Calculation 221 Form 201—Notice to Consumer Debtors Under § 342(b) of the Bankruptcy Code 237 Mailing Matrix 238 How to File Your Papers 238 After You File 241 7 Handling Your Case in Court 243 Routine Bankruptcy Procedures 244 Amending Your Bankruptcy Papers 253 Filing a Change of Address 257 Special Problems 258 8 Life After Bankruptcy 275 Newly Acquired or Discovered Property 276 Newly Discovered Creditors 277 Postbankruptcy Attempts to Collect Debts 278 Attempts to Collect Clearly Discharged Debts 280 Attempts to Revoke Your Discharge 281 Postbankruptcy Discrimination 281 Rebuilding Credit 282 9 Which Debts Are Discharged 289 Debts at Will Be Discharged in Bankruptcy 290 Disputes Over Dischargeability 302 10 Help Beyond the Book 309 Debt Relief Agencies 310 Bankruptcy Petition Preparers 312 Bankruptcy Lawyers 315 Legal Research 319 G Glossary 327 Appendixes A State and Federal Exemption Charts 341 Doubling 342 Residency Requirements for Claiming State Exemptions 342 Retirement Accounts 343 Special Considerations in States With “Bankruptcy-specific” Exemptions 343 B Worksheets, Charts, and Forms 381 Index 415 [...]... to figure out where to find the information you need 2 | how to file for chapter 7 bankruptcy Question Where to Find the Answer How does Chapter 7 bankruptcy work? Ch 1, “An Overview of Chapter 7 Bankruptcy Am I eligible to file for Chapter 7? Ch 1, “Who Can File for Chapter 7 and Ch 6, “Form 22A” Is my income low enough to qualify for Chapter 7? Ch 1, “Who Can File for Chapter 7 and Ch 6, “Form... Overview of Chapter 7 Bankruptcy This book explains how to file for Chapter 7 bank ruptcy (It’s called Chapter 7 because that’s where it appears in the bankruptcy code.) Chapter 7 bankruptcy is sometimes called “liquidation” bankruptcy it cancels most types of debt, but you have to let the 10 | how to file for chapter 7 bankruptcy What This Book Doesn’t Cover This book explains the procedures for filing... for Chapter 13 bankruptcy, with the help of Nolo’s Chapter 13 Bankruptcy, by Stephen Elias and Robin Leonard You should also look at options outside of the bankruptcy system, in “Alternatives to Chapter 7 Bankruptcy, ” below ChaPter 1 | should you file for chapter 7 bankruptcy? | 21 Converting to Chapter 7 After Filing for Chapter 13 Can you file under Chapter 13 and then convert to Chapter 7 later,... With Chapter 13 Bankruptcy 32 Family Farmers Should Consider Chapter 12 Bankruptcy 34 Business Entities Might Benefit From Chapter 11 Bankruptcy 36 ChaPter 1 | should you file for chapter 7 bankruptcy? | 7 I n the chapters that follow, we explain how to complete the required bankruptcy paperwork, what happens to your debts and property when you file for bankruptcy, how to. .. sense for me to use Chapter 7? Ch 1, “Does Chapter 7 Bankruptcy Make Economic Sense?” Do I have options other than filing for bankruptcy? Ch 1, “Alternatives to Chapter 7 Bankruptcy Can I avoid being evicted by filing for bankruptcy? Ch 2, “Evictions” Does bankruptcy stop my creditors from trying to collect what I owe them? Ch 2 What will happen to my car if I file? Ch 3 and Ch 5 What will happen to. .. of victory slim, however, you may choose to forgo bankruptcy altogether 26 | how to file for chapter 7 bankruptcy Tip Chapter 13 might be a better choice In some situations, Chapter 13 offers relief that is not available in Chapter 7 For example, if you are facing foreclosure on your home because of mortgage defaults or you have debts that you can discharge in Chapter 13 but not in Chapter 7, you... I forget to list a debt on my bankruptcy papers? Ch 8, “Newly Discovered Creditors” Can I give property away to friends or relatives to avoid losing it in bankruptcy? Ch 1, “Who Can File for Chapter 7 How will bankruptcy affect my child support obligations? Ch 2, “When the Stay Doesn’t Apply” and Ch 9, “Debts That Survive Chapter 7 Bankruptcy How do I fill out the bankruptcy forms? Ch 6 How do I file. .. except for the reasons specifically set forth in the federal law This letter is not meant in any way to be an acknowledgment that I owe this money Very truly yours, Lee Anne Ito Lee Anne Ito ChaPter 1 | should you file for chapter 7 bankruptcy? | 25 Using Bankruptcy to Get New Credit Even if you are judgment proof, you may want to file for bankruptcy to clear the decks for your next foray into the... I file my bankruptcy forms? Ch 6, How to File Your Papers” What happens at the 341 hearing? Ch 1, “An Overview of Chapter 7 Bankruptcy and Ch 7, “Routine Bankruptcy Procedures” What documents do I need to bring to the 341 hearing? Ch 1, “An Overview of Chapter 7 Bankruptcy and Ch 7, “Routine Bankruptcy Procedures” Can I change my bankruptcy papers once I file them? Ch 7, “Amending Your Bankruptcy. .. for Chapter 7 bankruptcy (See “Who Can File for Chapter 7, ” below, and Ch 6 for detailed information about these calculations.) After you file, you may want to amend some or all of your forms to correct mistakes you discover or to reflect agreements you reach with the trustee Amending these forms is fairly simple; we explain how to do it in Ch 7 Emergency Filing If you need to stop creditors quickly, . of Chapter 7 Bankruptcy Am I eligible to file for Chapter 7? Ch. 1, “Who Can File for Chapter 7 and Ch. 6, “Form 22A” Is my income low enough to qualify for Chapter 7? Ch. 1, “Who Can File for. Property? 26 CHAPTER 1 Should You File for Chapter 7 Bankruptcy? 6 | HOW TO FILE FOR CHAPTER 7 BANKRUPTCY Alternatives to Chapter 7 Bankruptcy 29 Do Nothing 29 Negotiate With Your Creditors 30 Get. Companion 1 1 Should You File for Chapter 7 Bankruptcy? 5 Bankruptcy in America: e Big Picture 7 An Overview of Chapter 7 Bankruptcy 9 Who Can File for Chapter 7 16 Does Chapter 7 Bankruptcy Make Economic