You hear the term chapter 7 bankruptcy quite a lot these days, however normally a proper explanation of exactly what it is is not included. Sadly many folks make dreadful errors in their bankruptcy filing because of this lack of explanation.
Having to go through the proceedings necessary in bankruptcy is the last thing people want to do. However if their debts add up to more than what they have coming in sometimes this is unavoidable.
There are a number of different forms of bankruptcy such as chapter 11 bankruptcy and the more common chapter 7 bankruptcy. Since chapter 7 bankruptcy is more common for individuals, it is the one we will focus on here.
Chapter 7 bankruptcy explained
When somebody goes through the process of chapter 7 bankruptcy, according to United States of America law they are essentially liquidating all assets (that are not legally exempt from liquidation) so they can pay back their creditors.
Chapter 7 is an option open to individuals, businesses, partnerships and corporations. There is, however, a special clause open to the individual within the framework of this chapter filing that is not available to the other entities.
The special clause for the public is called a discharge. What it basically means is that the public are able to free themselves totally from some of their debts.
Filing Chapter 7 Bankruptcy
Generally speaking to file a chapter 7 bankruptcy one mast supply the courts with copies of their tax returns, contracts of an executive nature, statements of financial affairs, all proof of liabilities and assets as well as documents to prove one's current income and necessary expenses.
For the public there are a series of additional items that are necessary. They will include but are not necessarily limited to the following: copies of your reports for credit counseling as well as any payment plan programs, statements of income/employee payments and in the case of being a student, copies of documents stating interest payments on one's student loans.
If you are in a situation where filing chapter 7 bankruptcy or any other bankruptcy type is a necessity, make sure you take a visit to the US courts website. Also make sure that if you do need to take action in the way of a bankruptcy proceeding you get a good professional lawyer to deal with your case.
Having to go through the proceedings necessary in bankruptcy is the last thing people want to do. However if their debts add up to more than what they have coming in sometimes this is unavoidable.
There are a number of different forms of bankruptcy such as chapter 11 bankruptcy and the more common chapter 7 bankruptcy. Since chapter 7 bankruptcy is more common for individuals, it is the one we will focus on here.
Chapter 7 bankruptcy explained
When somebody goes through the process of chapter 7 bankruptcy, according to United States of America law they are essentially liquidating all assets (that are not legally exempt from liquidation) so they can pay back their creditors.
Chapter 7 is an option open to individuals, businesses, partnerships and corporations. There is, however, a special clause open to the individual within the framework of this chapter filing that is not available to the other entities.
The special clause for the public is called a discharge. What it basically means is that the public are able to free themselves totally from some of their debts.
Filing Chapter 7 Bankruptcy
Generally speaking to file a chapter 7 bankruptcy one mast supply the courts with copies of their tax returns, contracts of an executive nature, statements of financial affairs, all proof of liabilities and assets as well as documents to prove one's current income and necessary expenses.
For the public there are a series of additional items that are necessary. They will include but are not necessarily limited to the following: copies of your reports for credit counseling as well as any payment plan programs, statements of income/employee payments and in the case of being a student, copies of documents stating interest payments on one's student loans.
If you are in a situation where filing chapter 7 bankruptcy or any other bankruptcy type is a necessity, make sure you take a visit to the US courts website. Also make sure that if you do need to take action in the way of a bankruptcy proceeding you get a good professional lawyer to deal with your case.
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