Chapter 7 Bankruptcy
Chapter 7 bankruptcy also referred to as ‘straight bankruptcy’ is a situation where the debtor hands over all their surviving property to a bankruptcy trustee. It is converted in to cash by the trustee in order to allocate amongst the creditors. The debtor in the case of a chapter 7 bankruptcy receives a release of all dischargeable debts within approximately four months. Theories aside, many people who claim chapter 7 bankruptcy have relatively no large assets to lose as they have lost it all . This will mean a new beginning for the bankruptcy party is required.
chapter 7 bankruptcy information
The debtor in order to be able to receive Chapter 7 bankruptcy, must be an individual, partnership of corporation or any other business unit. A sole individual though cannot file under chapter 7 bankruptcy. An exception is made only if the debtor receives credit counseling from an approved agency within 180 days before filing for chapter 7 bankruptcy. A chapter 7 bankruptcy is only issued after the debtor fills out a petition with the bankruptcy court regarding their assets. A schedule of assets and liabilities, a schedule of current income and expenditures and a statement of financial affairs with the court must also be filed in addition .
The main reason for bankruptcy is to give an honest individual a new beginning. Therefore the debtor is not legally responsible for discharged debts. As opposed to the previous mentioned case under the chapter 7 bankruptcy it is only an option for individual debtors. Though this is the general procedure, an individual’s right of discharge is not to be taken for granted as some categories of debts are not discharged.
In order to file for a chapter 7 bankruptcy it is essential that you first speak with a qualified attorney and figure out what the best choice for you is. First though you need to figure out for yourself if you actually need to file for bankruptcy. Many such evaluation forms are available online for those interested. Always make sure that you provide your attorneys with complete and correct information to gain a better evaluation on your case. It is also essential to remember that the debtor receives a discharge on all dischargeable debts in chapter 7 bankruptcy. Therefore though in some cases this would mean losing all ones assets, in the majority of cases, this isn’t so. Therefore it is essential that you have a bankruptcy attorney before making any rash decisions.
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