Pursuant to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the person contemplating filing for Chapter 7 Bankruptcy must pass the “Means Test.” The "means test" determines who can or who cannot file for Chapter 7 Bankruptcy. To see if you meet the Means Test in your state, visit the U.S. Department Of Justice.

To file for a Chapter 7 Bankruptcy, the individual must file a Bankruptcy Petition along with a Statement of Financial Affairs with the bankruptcy court.

20 to 40 days after the bankruptcy petition is filed, the bankruptcy trustee will hold, and the bankruptcy petitioner must attend, the 341 Meeting, also known as the first meeting of creditors. At the 341 Meeting, the trustee and in some cases the creditors, will ask the bankruptcy filer various questions about his or her property and debts.

After the 341 Meeting, the bankruptcy filer’s creditors have 60 days to file an adversary proceeding to convince the bankruptcy court that the bankruptcy filer should NOT be allowed to walk away from his or her debts. During this time period, the bankruptcy filer must cooperate with the trustee in providing any requested information, and may need the assistance of a bankruptcy lawyer to oppose any adversary proceedings.

After the 341 Meeting, the bankruptcy filer has 45 days to sign and file with the Court one or more Reaffirmation Agreements pursuant to which the bankruptcy petitioner agrees to remain liable and repay the balance of a debt (such as a vehicle lease or financing agreement, or a home mortgage).

In a Chapter 7, the bankruptcy filer must turn over all of his or her non-exempt assets (if any exists) to a Chapter 7 trustee. The Chapter 7 trustee will in turn liquidate the assets and distribute its proceeds to the bankruptcy filer's creditors.

Secured creditors are satisfied first and generally will get dollar for dollar on their claims. Next in line are priority claims, which include the administrative expenses associated with the bankruptcy and certain other special claims such as many types of taxes and unsecured claims for wages. Finally, the claims of unsecured, non-priority claims share in whatever assets remain on a pro rata basis.

Once that has been completed, the bankruptcy filer must then complete a government approved personal financial management education class. Once proof of attendance has been submitted to the Bankruptcy Court, the Bankruptcy Court will order the discharge of all dischargeable debts that existed on the date the bankruptcy case was filed. Typically, an individual bankruptcy filer will receive a discharge within 4-6 months of filing the bankruptcy petition.

Non Dischargeable Debts, debts that will remain the obligation of the bankruptcy petitioner typically include:

1. Recent taxes and penalties
2. Penalties payable to the government
3. Student Loans
4. Child and spousal support
5. Criminal fines and restitution
6. Condominium/Association Dues and Fees
7. Accident claims involving intoxication while operating a car, boat, or plane.
8. Debts not listed in the filer’s schedule of debts
9. Luxury goods over $500 purchased within 90 days of filing for Bankruptcy
10. Debts listed in a prior bankruptcy where debtor was denied a discharge