Filing Chapter Seven requires you to list all debts. You legally aren't allowed to pay a favored creditor, such as a relative or friend, and then file for bankruptcy within 90 days. You're also not allowed to pay more than 600 dollars to a creditor within 90 days of filing. You'll have to list all property transactions within the past year, and lying about it subjects you to being prosecuted for perjury. You may want to voluntarily pay off some debts prior to filing that otherwise would be non-dischargeable, in order to keep good relations with a valued creditor. This must be done prior to 90 days of filing. You also may sign a 'reaffirmation agreement' with an individual creditor, by which you agree to continue paying a debt after bankruptcy. After you file, all creditors that have filed claims against you in the same class are considered equal in receiving payment from your liquidated property. Your property is sold by a trustee assigned by the bankruptcy court, who pays all creditors who file valid claims against your estate. Nothing can be sold or paid without the court's consent. You'll be required to go to court to attend a creditors' meeting. Afterwards, the trustee collects any property that is not exempt, sells it at auction, and pays off your creditors with the proceeds in a priority defined by law. To find out how to deal with creditors before, during, and after Chapter Seven, contact a bankruptcy attorney.
