With 2012 now behind us and 2013 here, many people are looking for ways to get a new financial start for the New Year. For the millions of people in debt, bankruptcy is a prime choice to achieve this. Chapter 7 Bankruptcy, or liquidation bankruptcy, as it is sometimes called, is a quick way to eliminate unsecured debt. Chapter 7 Bankruptcy can be filed by individuals as well as by companies. The ultimate goal of Chapter 7 bankruptcy filing and the reason Congress created it is for the honest, hardworking American to earn a fresh start by eliminating overwhelming debt.
A typical Chapter 7 case takes about three to six months from start to finish. However, it begins with the actual filing of the bankruptcy petition with the bankruptcy court. The request for bankruptcy must include detailed accounts of the debtor's income and expenses. Proof of income is required by the court in the form of bank statements, pay stubs and income tax returns. All property and personal property must be listed. A complete list of the debtor's creditors should also be included so that they can be notified of the bankruptcy case by the court. This part of the bankruptcy case is usually the most time-consuming and involved for the debtor as detailed information is required and the petition must be completed accurately to avoid the case being closed. If the debtor has any doubts, it is best to hire a bankruptcy lawyer to prepare the Chapter 7 bankruptcy case to ensure that the case runs smoothly from start to finish. end.
In the case of Chapter 7, part of the debtor's property can be sold by the trustee so that the proceeds can be divided and assigned to the creditor to pay off part of the debt. The debtor in return gets the remaining unsecured debts eliminated or wiped out. This is the 'liquidation' aspect of Chapter 7. It is not very common for a debtor to have personal property or assets liquidated as part of their Chapter 7 bankruptcy. This is due to exemption laws which are bankruptcy laws that allow a debtor to keep a certain amount of property deemed exempt. The goods that the debtor is authorized to keep or exempt in the Chapter 7 Bankruptcy is determined by the specific exemptions stated in state law. Bankruptcy exemption laws vary from state to state, with some states allowing more generous exemptions to debtors than others. However, the debtor must file for bankruptcy in the state where he resides. This is another great reason to have the help of a bankruptcy lawyer. Bankruptcy attorneys are very familiar with their state's exemption laws and can make maximum use of them to protect the maximum amount of personal property for their client. The lawyer may even think that it is more beneficial for his client to use the federal exemptions rather than the state exemptions to protect his client as much as possible. Also, if the debtor owes money on a secured debt like a car or a house, the debtor can choose to relinquish the property in bankruptcy and get out of it freely and without financial obligation. to the lender. The debtor can also choose to retain the property in bankruptcy as long as they can afford to continue making payments and the lender agrees.
Filing for Chapter 7 bankruptcy in the New Year can be a quick and easy solution for those in debt to get that fresh start for which Chapter 7 was designed.