Defining Chapter 7 Bankruptcy
A Chapter 7 bankruptcy offers a person in severe debt the opportunity to come out of overwhelming debt with a fresh start. Chapter 7 bankruptcies are generally conducted in a more efficient fashion than other bankruptcy processes such as a Chapter 13 bankruptcy. If you want to get out of massive debt fast, then you should consider filing a Chapter 7 bankruptcy.
With a Chapter 7 bankruptcy, all non-exempt property of the person filing is sold. Many times, a debtor does not have any assets to lose, so filing a Chapter 7 bankruptcy can be a favorable option due to the efficiency of the entire process. About 65% of all consumer bankruptcies are filed using the Chapter 7 bankruptcy process.
During a Chapter 7 bankruptcy, a trustee is appointed that sells all of the assets of the debtor. The trustee also is appointed to collect the non-exempt property involved in the case. No payments are involved in a Chapter 7 bankruptcy process, unlike the Chapter 13 bankruptcy process.
In most cases dealing with Chapter 7 bankruptcies, the debtor loses all of his or her assets. If you feel incredibly uncomfortable by this fact, you should speak with an attorney regarding a Chapter 7 bankruptcy. There may be other factors that mean you do not need to file a Chapter 7 bankruptcy and are eligible for a less risk adverse form of bankruptcy, such as a Chapter 13 bankruptcy.
Under a Chapter 7 bankruptcy, there are a variety of debts that can be classified under a Chapter 7. In total, there are nineteen classes of debt that are organized into the Chapter 7 category. A debtor can then receive a discharge that pertains to these 19 classes of debt.
Before filing for a Chapter 7 bankruptcy, you will most likely fill out an evaluation form for an attorney's law office or a law firm. After filling out the evaluation form, the attorney will then make his or her best logical conclusion as to what is best for your financial situation. If Chapter 7 seems to be the best outlet for you, then that is the avenue the attorney will pursue with you.
There are certain kinds of property that are exempt from a Chapter 7 filing. Some of these types include a place of residence, veteran's benefits, social security benefits, professional instruments, and life insurance contract. For any type or property that is non-exempt, the trustee appointed then takes control of it.
After you file a Chapter 7 bankruptcy, creditors can no longer contact you for payments. You are not legally bound to pay creditors back under a Chapter 7 bankruptcy.
Overall, you should be organized when dealing with a Chapter 7 bankruptcy. If you feel overwhelmed, consult with an attorney to know you are taking the right steps.
