Describing Chapter 7 Bankruptcy So We All Understand It
The term Chapter 7 bankruptcy is a term that is thrown about a great deal in the media, but clear and concise explanations of the term are usually not offered. Because of this, there is some confusion as to what exactly chapter 7 bankruptcy actually is and this sometimes leads to people making critical errors when filing!
Having to go through the proceedings necessary in bankruptcy is the last thing people want to do. However if their debts add up to more than what they have coming in sometimes this is unavoidable.
Numerous kinds of bankruptcy proceeding exist including but not limited to chapter 11 and chapter 7. In this article our focus is going to be on chapter 7 since this is more for individuals.
The Definition Of Chapter 7 Bankruptcy
When somebody goes through the process of chapter 7 bankruptcy, according to United States of America law they are essentially liquidating all assets (that are not legally exempt from liquidation) so they can pay back their creditors.
If you are a corporation, business and or partnership you will also be able to apply for this chapter like an individual. Chapter 7 bankruptcy is however different for individuals in that they have open to them a special extra clause in the bankruptcy filing framework.
That special clause is known as a "discharge." What a discharge refers to is the freeing of the individual from certain debts.
The first things to do when filing chapter 7
On a baseline level, those filing for Chapter 7 must provide copies of tax returns; executed contracts and leases that have been expired; financial affairs statements; proof of assets and liabilities; and copies/schedules of current expenditures and income.
For individuals there are additional items that must be provided to the court as well. These items include copies of credit counseling reports and repayment plan programs, employer payments and statements of income, interest payments on student loans, etc.
This is, of course, a brief overview and more detailed information is provided by the government and federal courts at the website uscourts [dot] gov. However, remember filing for Chapter 7 protection by yourself is not advised, you should get professional help from a lawyer.
Having to go through the proceedings necessary in bankruptcy is the last thing people want to do. However if their debts add up to more than what they have coming in sometimes this is unavoidable.
Numerous kinds of bankruptcy proceeding exist including but not limited to chapter 11 and chapter 7. In this article our focus is going to be on chapter 7 since this is more for individuals.
The Definition Of Chapter 7 Bankruptcy
When somebody goes through the process of chapter 7 bankruptcy, according to United States of America law they are essentially liquidating all assets (that are not legally exempt from liquidation) so they can pay back their creditors.
If you are a corporation, business and or partnership you will also be able to apply for this chapter like an individual. Chapter 7 bankruptcy is however different for individuals in that they have open to them a special extra clause in the bankruptcy filing framework.
That special clause is known as a "discharge." What a discharge refers to is the freeing of the individual from certain debts.
The first things to do when filing chapter 7
On a baseline level, those filing for Chapter 7 must provide copies of tax returns; executed contracts and leases that have been expired; financial affairs statements; proof of assets and liabilities; and copies/schedules of current expenditures and income.
For individuals there are additional items that must be provided to the court as well. These items include copies of credit counseling reports and repayment plan programs, employer payments and statements of income, interest payments on student loans, etc.
This is, of course, a brief overview and more detailed information is provided by the government and federal courts at the website uscourts [dot] gov. However, remember filing for Chapter 7 protection by yourself is not advised, you should get professional help from a lawyer.
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Read additional How To File Bankruptcy Facts at this location. The blog is the provider of this How To File Chapter 7 Bankruptcy article here!
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