January 3, 2010
Chapter 7 Bankruptcy
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. It is converted in to cash by the trustee in order to allocate amongst 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. If the debtor receives credit counselling within 180 days from an approved agency, some exceptions are made. The debtor must fill out a petition with the bankruptcy court regarding their assets in order to receive Chapter 7 bankruptcy. In addition to this the debtor must also file a schedule of assets and liabilities, a schedule of current income and expenditures and a statement of financial affairs with the court .
The main reason for bankruptcy is to give an honest individual a new beginning. Debtor therefore is not legally discharged for the liabilities. 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. Though this is the general procedure, an individual’s right of discharge is not to be taken for granted as some categories of debts are not discharged.
In order to file for a chapter 7 bankruptcy it is essential that you first speak with a qualified attorney and figure out what the best choice for you is. First though you need to figure out for yourself if you actually need to file for bankruptcy. Many such evaluation forms are available online for those interested. Complete and correct information in the attorney is essential for any future issues. The recept of all the debts for the debtor should also be made in chapter 7 bankruptcy. Although in some instances, one might lose his all assets, in other cases it might not be the case. Hence a bankruptcy attorney prior to making any rational decisions is safe.
Filed under Blog by IRS Tax Attorney
