Chapter 7 Bankruptcy
Chapter 7 bankruptcy also known as a liquidation process is designed primarily to free up the debtors who are under financial inability to pay the debts. Chapter 7 bankruptcy is generally filed by the debtor for his huge debts from medical bills, credit card debts or certain unfortunate things like health, divorce etc. If a person is having consumer debts at the peak then such a case has to pass "means test" so as to evaluate whether it can be filed under chapter 7 bankruptcy. The means test is avoiding a debtor from being exempted to pay the dues when he is capable of. If the means test report abuse the court can either dismiss the case or convert it to chapter 13 bankruptcy at the will of the filer.
In chapter 7 bankruptcy the trustee who is appointed by the court for your case is responsible to sell your property and assets that are not exempted. The value gained from the sale is paid as a debt to the creditors. The value can be part or full. Full payment though has never been seen but the debtor gains a lot of advantage as lot of debt is discharged at a single blow. The filer can ask for certain assets to be exempted with the help of an attorney. If exempted by the law, the debtor retains control of the exempted property.
Some non dischargeable debts are
- Student loans.
- Debts caused due to death or injury if driver had alcohol or drugs.
- Child Support.
- Debts that are not listed to the fullest in the bankruptcy.
- A debt that can be proved to be obtained from fraud, theft or willful malicious injury, etc.
After the case has been discharged it may permanently prohibit the creditor from harassing the debtor for debts that were discharged. Also the person gets a fresh start to start his life free of debts in just four months. If a person does not cooperate during the chapter 7 bankruptcy process the court may dismiss the case and also may deny the discharge one was seeking for. A creditor has the right to apply for dismissal of a case if a person earns more than the median income for the residence and size of family. Chapter 7 case is discharged within 4 months of filing. First meeting is held within first 40 days of filing and the case is discharged after 70 days. The cost involved in chapter 7 bankruptcy fees is 274 dollars.
Other useful links:
[Filing Bankruptcy]
[Chapter 13 Bankruptcy]
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