In Chapter 7 bankruptcy, a New Hampshire debtor will have his or her assets liquidated to repay outstanding debts. However, some assets may be exempted from liquidation, which means that they will not be sold to pay off creditors. If a debtor owns property that is secured by a lien or a mortgage, that property may already be pledged to other creditors.
When an individual seeks a liquidation bankruptcy, that person is required to pay a $245 filing fee as well as a $75 miscellaneous filing fee. Those who cannot afford to pay the fee upfront may be able to pay it in installments or may have the fee waived altogether. In addition, a debtor must provide a list of all creditors, a list of monthly expenses and a list of property when filing for Chapter 7 bankruptcy.
A stay may be placed that may stop creditors from taking action against a debtor when a bankruptcy petition is filed. However, this stay may only last for a short time and may not stop some types of creditor actions. Debtors must attend a creditor meeting and otherwise cooperate with the trustee assigned to the case. A trustee may provide a list of topics that may be covered during the meeting.
Filing for bankruptcy may provide a debtor with the ability to resolve some or all of their debt. Those who are considering filing for bankruptcy may wish to talk to a bankruptcy attorney prior to submitting the petition. This may be worthwhile because that attorney may be able to provide advice as to how Chapter 7 bankruptcy works and if an individual may be eligible to file for its protections. After a bankruptcy petition is filed, a bankruptcy attorney may also be able to protect a debtor from any potentially illegal creditor action.
Source: United States Courts, "Liquidation Under the Bankruptcy Code", September 19, 2014