Chapter 7 bankruptcy also referred to as ‘straight bankruptcy’ is a situation where the debtor hands over all their surviving property to a bankruptcy trustee. The trustee then converts it in to cash in order to allocate it among the creditors. The debtor in the case of a chapter 7 bankruptcy receives a release of all dischargeable debts within approximately four months. Since they have lost it all, many people who claim Chapter 7 bankruptcy will not receicne a large sum of money . This therefore is a means that would enable the bankrupted party a new beginning.
chapter 7 bankruptcy information
The debtor in order to be able to receive Chapter 7 bankruptcy, must be an individual, partnership of corporation or any other business unit. A sole individual though cannot file under chapter 7 bankruptcy. An exception is made only if the debtor receives credit counseling from an approved agency within 180 days before filing for chapter 7 bankruptcy. The debtor must fill out a petition with the bankruptcy court regarding their assets in order to receive Chapter 7 bankruptcy. A schedule of assets and liabilities, a schedule of current income and expenditures and a statement of financial affairs with the court must also be filed in addition .
Ah honest individual should be given a new beginning is the concept behind bankruptcy. Therefore the debtor is not legally responsible for discharged debts. In the case of discharging under chapter 7 bankruptcy, it should be known that it is only an option for individual debtors as opposed to the previously mentioned scenario. Since some categories of debts are not discharged , an individual’s right of discharge is not to be taken fro granted.
It is a smart option to figure the best choice for you regarding the chapter 7 bankruptcy, with the help of a qualified attorney. The need of filing a bankruptcy should be finalized before anything. Many such evaluation forms are available online for those interested. Complete and correct information in the attorney is essential for any future issues. It is also essential to remember that the debtor receives a discharge on all dischargeable debts in chapter 7 bankruptcy. Although in some instances, one might lose his all assets, in other cases it might not be the case. Therefore it is essential that you have a bankruptcy attorney before making any rash decisions.
