Chapter 7 Bankruptcy

Chapter 7 Bankruptcy Explained?

•    Chapter 7 Bankruptcy is a financial alternativethat are offered to struggling consumers or business entities.

•    Chapter 7 Bankruptcy is found in Title 11 of the United States Bankruptcy code. The program, according to the federal Bankruptcy laws of the United States, governs the process of liquidation.
•    Those who file for Chapter 7 bankruptcy will enter a liquidation process (selling assets for cash) to reduce their debt obligations. Although undesirable, the liquidation process is an effective way to reduce debts and obtain a “fresh start.”
•    Once the liquidation has been processed, the creditors owed, will then collect the proceeds of the liquidation process. When the creditors are paid, the majority of the debts are discharged; a clean debt history is obtained by the individual or entity filing for Chapter 7 Bankruptcy.

Chapter 7 Bankruptcy Legal Process

•    To initiate the Chapter 7 process, the individual or entity must file the pertinent documents and papers with their local bankruptcy court.
•    To receive a valid standing, the filing party must demonstrate the inability to file for reorganization or a repayment plan. A Chapter 7 filing does notoffer the debtor the ability to fulfill their debts through incremental payments, but instead, a liquidation process where the debtor’s assets are held against their payment obligations.
•    As a result of the liquidation process attached to Chapter 7 Bankruptcy, the individual or entity filing must provide (to the court system) a comprehensive list of all assets suitable for liquidation. Upon receiving the list of assets, the court will review the information and determine if the debtor’s assets are substantial enough to fulfill the underlying debt obligation.
•    After approval, the filing party will schedule a meeting with the underlying creditors to discuss the assets awarded. During this meeting, creditors will negotiate with the debtor and state whether partial payment is acceptable or that a full payment is required.
•    Alldebts obtained will be reviewed during this meeting; if the court system finds that the debts were fraudulently obtained or were attached to items, such as student loans, the filing party may be relieved of their obligation.
•    IN most instances, 4-6 months is required to initiate and fortify a Chapter 7 filing.

Legal Aid needed for Chapter 7

•    It is suggested that the filing party incorporate a Bankruptcy attorney or legal professional to facilitate their Chapter 7 claim.
•    Bankruptcy attorneys will streamline the filing through constant contact with the local court systems. This communicative effort, which organizes the liquidation process, is made possible through the attorney’s knowledge of bankruptcy laws.
•    A bankruptcy attorney’s role (varies on a case by case basis) will also facilitate the delivery process of the liquidized assets to the respective creditors.