Chapter 7 Bankruptcy - Essential Information

Chapter 7 Bankruptcy - Essential Information "In the aftermath of the economic downturn in the United States, it is not uncommon to hear of personal and corporate bankruptcies. Simply put, bankruptcy is a legal proceeding that addresses the financial and debt-related issues of an individual or an organization. In the United States, bankruptcy is categorized broadly under Chapters 7, 9, 11, 12, 13, and 15. The majority of bankruptcy filings occur under Chapters 7, 11 and 13. The first section of the country's bankruptcy laws comprises Chapters 7, 11, 12, and 13, while the second section contains Chapters 7, 9, 11, and 12. In this article, you will learn about Chapter 7, which is unquestionably one of the most important bankruptcy chapters.Chapter 7 bankruptcy is utilized more frequently by individuals who have fallen into debt. Technically, Chapter 7 is known as Liquidation under the Bankruptcy Code. According to this definition, the assets of the individual petitioning under this chapter will be sold and auctioned to repay the debt. A person may file for Liquidation under the Bankruptcy Code so long as he has not denied his court appearance. Additionally, the debtor must consult with a credit counselor one hundred eighty (180) days prior to filing his petition.The most significant consequence of filing for Chapter 7 bankruptcy is the loss of property and other assets. The court imposes a case filing fee of approximately $300. To file the petition himself, the debtor must reproduce records of all his creditors, the amount of his debt, his annual income, and property information, among other things. In addition, the debtor would be required to provide evidence of his monthly expenses, including phone bills and taxes. Nevertheless, there are several alternatives to this chapter. Chapter 11 and Chapter 13 are included.Roland Poitevin is a devoted author who is passionate about business and environmental issues.
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