Bankruptcy options.

Filing a Chapter 7 bankruptcy.

When you file for bankruptcy, you are given an opportunity to emerge out of a financial crisis and start anew. The Chapter 7 of the Bankruptcy Code is the best way to achieve this result in the shortest period of time. Under the Chapter 7 Bankruptcy Code all non-exempt property is sold and the proceeds are distributed to the creditors to pay off the debt. In most cases, the borrower/debtor has very little assets to lose, so the fiscal cleansing can take place quickly.

This process is often referred to as a liquidation (converting the debtor’s assets into money) or a straight bankruptcy, This type of filing is the most common form of bankruptcy.

With this type of filing, the borrower is allowed to start afresh. In the process most debts are debts are discharged within months of the filing of the bankruptcy petition.

In a Chapter 7 filing, a trustee is appointed to administer all non-exempt property, sells the assets and distributes proceeds from this sale to appropriate creditors. Chapter 7 is different from other bankruptcy filings there are no payments from the debtor to the creditors during the process and after.

Under a Chapter 7 Bankruptcy filing, the debtor receives a discharge on all dischargeable debts. There are multiple classes of debt, such as child support, most taxes and student loans that are discharged under a Chapter 7 Bankruptcy.

One benefit of a Chapter 7 bankruptcy filing is that a debtor will be allowed to enter a reaffirmation agreement to the lender and continue to pay for a car loan or a mortgage on their home.

A debtor in distress who is engaged in business and has other asset would prefer to avoid the prospects of liquidation. A Chapter 11 filing might be a better option for these type of individuals associated with corporations and partnerships. In most cases, individuals with a regular source of income would be better suited to file a Chapter 13 bankruptcy.

Once you have decided to proceed with your filing, you should seek competent legal counsel. A bankruptcy filing has a clearly laid of set of rules and procedures, and you’ll need the help of a competent attorney to file the appropriate forms. Once you made the commitment and have found the appropriate attorney, you should leave it to your counsel to take your case to its logical conclusion.
 

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