Reporting liquidating distributions
Debtors should be aware that there are several alternatives to chapter 7 relief. With the court's permission, however, individual debtors may pay in installments.
For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began).
Moreover, the court may dismiss a chapter 7 case filed by an individual whose debts are primarily consumer rather than business debts if the court finds that the granting of relief would be an abuse of chapter 7. Unless the debtor overcomes the presumption of abuse, the case will generally be converted to chapter 13 (with the debtor's consent) or will be dismissed. Part of the debtor's property may be subject to liens and mortgages that pledge the property to other creditors. Subject to the means test described above for individual debtors, relief is available under chapter 7 irrespective of the amount of the debtor's debts or whether the debtor is solvent or insolvent.
If the debtor's income is less than 150% of the poverty level (as defined in the Bankruptcy Code), and the debtor is unable to pay the chapter 7 fees even in installments, the court may waive the requirement that the fees be paid. The Bankruptcy Code allows an individual debtor (4) to protect some property from the claims of creditors because it is exempt under federal bankruptcy law or under the laws of the debtor's home state. The debtor should consult an attorney to determine the exemptions available in the state where the debtor lives. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor. trustee or bankruptcy administrator (5) schedules the meeting at a place that does not have regular U. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the order for relief.
Among the schedules that an individual debtor will file is a schedule of "exempt" property. Thus, whether certain property is exempt and may be kept by the debtor is often a question of state law. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments.
During this meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions.
In most cases, unless a party in interest files a complaint objecting to the discharge or a motion to extend the time to object, the bankruptcy court will issue a discharge order relatively early in the case – generally, 60 to 90 days after the date first set for the meeting of creditors.