When you file for bankruptcy, you give yourself a chance to redeem yourself from financial problems. A chapter 7 bankruptcy is good way to start afresh financially and eliminates your debt problems faster. It is also known as liquidation or straight bankruptcy, which is the sale of a debtor’s nonexempt assets and then the earnings are distributed to the creditors. What the debtor is allowed to keep is known as exempt property which is determined by the state law. This bankruptcy option is normally used in cases where the debtor has no property to lose.
Chapter 7 bankruptcy is the most common alternative amongst debtors. This is because it is one of the quickest ways the debtor gets to clear his debts. To file for this type of bankruptcy, you are required to file a petition plus other forms which you then file with the bankruptcy court in your region. When you fill in the forms you are required to describe your assets, your recent income and expenses, what you owe, assets that you state you are allowed to keep by law, property that you owned and money spent in the two previous years and additionally, property that you sold or gave out in the last two years.
When you file for a Chapter 7 bankruptcy, an appointed trustee collects all your no-exempt property and sells your assets. Proceeds from this are then distributed among your creditors. The debtor receives freedom from all dischargeable debts.
An added advantage when you file for Chapter 7 bankruptcy is that the “Order of relief” is put into effect. Informally known as the automatic stay, this immediately stops your creditors from coming after your assets or cutting off your utility services.
Originally posted 2009-12-02 14:52:30. Republished by Old Post Promoter
Related posts about loans after bankruptcy:
- What Bankruptcy Chapter 7 Entails Bankruptcy chapter 7 is also known as the liquidation chapter. It allows an appointed trustee to take the assets of the debtor, sell them and pay off the debts. The petition is either voluntary or involuntary. Voluntary means that it is out of the debtors willingness that a petition is filled. Involuntary means that that [...]...
- Chapter 7 Bankruptcy Laws When you are in debt and choose to file for bankruptcy it is imperative to be aware of the types of bankruptcy and what it entails. Chapter 7 bankruptcy has many laws that you need to be aware of should you find yourself needing to file for one. This type of bankruptcy is very popular with [...]...
- Chapter 7 Or Chapter 13 Bankruptcy A New Beginning With Bankruptcy – Chapter 7 Bankruptcy No one ever expects it to happen but everything get out of control and you are in debt far over your income. No one wants to think about filing bankruptcy but sometimes you just don’t have a choice. Chapter 7 bankruptcy allows you to emerge from a [...]...
- Chapter 7 And 11 Bankruptcy There are two broad forms of bankruptcy, no matter your definition – Liquidation and reorganization. Liquidation is provided for in the United States under Chapter 7 of the Bankruptcy Code while Reorganization is covered under chapters11, 12 and 13. CHAPTER 7 Chapter 7 bankruptcy is the chapter of the Bankruptcy Code that provides for the sale of [...]...
- Bankruptcy Chapter 7 VS Bankruptcy Chapter 13 There are many different types of Bankruptcy under Bankruptcy Law that are designed and structured to assist an individual or corporation that is financially burdened by debts in different ways. The most common types of bankruptcy are a Bankruptcy Chapter 7 and a Bankruptcy Chapter 13. A Bankruptcy Chapter 7 can be filed by either an [...]...