Chapter 7 bankruptcy
Often people run into higher debt than what they can manage. In such cases the person has no option other than filing for bankruptcy. There are basically two types of bankruptcies Chapter 7 bankruptcy or Chapter 13 bankruptcy. Out of these Chapter 7 is the most commonly filed bankruptcy. Under this the person straight away files for a liquidation bankruptcy, but this is more difficult to file. The Chapter 13 bankruptcy involves a repayment plan for the person.
With a Chapter 7 bankruptcy the court appoints a trustee for the debtor. The trustee will decide on the liquidation of the assets to pay back the creditors. If the trustee decides that none of your assets can be liquefied then a no distribution report is filed with the bankruptcy court, but on the other hand if the assets are non exempt then they are sold off and the money is used to make the payments to the creditors. In some cases in Chapter 7 bankruptcy there are chances that you may not have to repay your creditor. The Chapter 7 bankruptcy is also called as straight bankruptcy.
With a Chapter 7 bankruptcy debtors often are worried that they would lose all their assets. But this is not true for all the cases. Losing asset may depend on the debt that you owe to the creditors and how co-operative are the creditors. This condition needs to be discussed with a bankruptcy lawyer. Often people feel that they can file bankruptcy on their own. But filing bankruptcy is not an easy task you should always look for a lawyer who can help you out.
When a person files for bankruptcy the creditors are prohibited to get in touch with the debtor to gain their money. This condition would prevent the creditor from taking away the salary from the debtor and from taking the possession of the property and the house of the debtor. The Chapter 7 bankruptcy is the a good option for people who do not have any pending student loan to pay, any income tax debt, who have not been charged with any fine or penalty for violation of any law and moreover they have income below the state median.
The Chapter 7 bankruptcy procedure lasts only for 3-4 months after filing the discharge and no one files any motions. With the Chapter 7 bankruptcy law people can file a petition if they have no sources to pay off their debts. With this law the trustee keeps a portion of the property of the debtor as a security for the payment. The most popular debts that are discharged in Chapter 7 bankruptcy are credit cards and medical bills.
Once you have analyzed the condition specified in Chapter 7 then you should look out for some legal help so that you understand the finer aspects of the filing. There are many people who do not consider taking any legal help but it is always advised that a legal look out would be better for a person who decides to file bankruptcy. After you have decided on your lawyer then arrange for a personal meeting with him and go over the case. The lawyer is supposed to ask you questions and is also supposed to answer all your queries. The lawyer will help you in understanding the bankruptcy rules and the situations that can be faced. He will also help you in finishing the means test prescribed by the Bankruptcy Abuse Prevention and Consumer Protection Act.
You should calculate how much is the whole process going to cost you. The fee for filing a bankruptcy varies. There are a quarter of lawyers who would typically charge a flat fee, whereas there are a section of lawyers that would charge a fee that depends on the total debt that you have. Besides these types of lawyers there are lawyers who would require you to pay an upfront fees before they file your bankruptcy. Once you have hired a lawyer then you can ask your creditors to carry out further communication with your lawyer.
The next thing is that you would have to look forward to is meeting your creditors. After the lawyer submits your formal request then you are contacted via mail about the meeting date with your creditor, which is called as a 341 meeting in terms of bankruptcy. This meeting is important; as it would make sure that you have been honest in answering the questions on the bankruptcy petition. Besides it also makes sure that you have understood all the conditions and have decided to file a bankruptcy. Besides this it is important that you should have met your lawyer before this meeting so that he can go over all the debts and the situations in the list. You are supposed to mention a list of your assets. Besides the lawyer would also have a set of sample questions that you can rehearse over before going in for the meeting.
On the 60th day after your 341 meeting with the creditors is the first deadline for the creditors to file lawsuits to confront the discharge of debts. If they do not file any lawsuits then you would get a notice of discharge of debt under Chapter 7 bankruptcy, which means that you have no compulsion to pay back the discharged debt. In case you have filed a Chapter 13 bankruptcy case, then you will receive the notice of discharge about 30 to 60 days after your final payment has been made and the trustee makes certain that your payment plan has been monitored and accomplished.
Most of the Chapter 7 bankruptcies are discharged easily but the particular debts would take time to get discharged. With the help of your bankruptcy lawyer this task can be made easy. In case the creditors are not satisfied with the discharge then they can re-open the case. The court however decides which Chapter should you file the bankruptcy in.
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