What is Chapter 7 Bankruptcy?
Also known as ‘straight bankruptcy’, it is a measure for helping people in debt, who find it difficult to take care of even their day-to-day expenses; let alone paying the creditors. When a debtor files for it, a trustee is appointed to take care of the issue. There are exemptions, which are taken into account. The trustee is in-charge of the debtor’s ‘non-exempt property’. It is the trustee, who will divide the property among the different creditors. On an average, majority of the debtors are allowed to keep whatever little they have and make a fresh start. After filing for bankruptcy under this chapter, creditors are not allowed to take any action against the debtor, with regard to the said debt.
Frequently Asked Questions
What are Chapter 7 exemptions?
Different exemptions have been made under Chapter 7. Know all about them in this article, which details all the exemptions.
Who qualifies for this type of bankruptcy?
Before filing, the debtor should have attended bankruptcy counseling. This counseling should take place 6 months prior to the filing. The next criteria is that the debtor should qualify the means test. Another qualification demands that the debtor should have received chapter 7 bankruptcy discharge within the last 8 years, or chapter 13 bankruptcy discharge in the last 6 years. Last, but not the least, the debtor’s bankruptcy petition should not have been dismissed within the last 6 months.
What is the difference between chapters 7, 13, and 11 of bankruptcy law?
Different chapters of the bankruptcy law cover different areas and all probable cases. You will find the differences outlined in this article which details the differences.
Should I take bankruptcy assistance, before I file for it?
This is a very common question asked by people. Depending on the exact kind of Bankruptcy Attorney chicago IL, you will have to decide about seeking assistance. In any case, it is always good to go for a consult and assistance.
What is the time period required to file a chapter 7 bankruptcy case?
There is no specific time period for filing a case under this chapter. However, it cannot be filed by individuals whose bankruptcy case was dismissed within 180 days, prior to filing.
The chapter mentions ‘non-exempt’ property. What does it exactly mean?
‘Non-exempt’ property is one that is taxable. Majority of the personal property of the debtor is sold as assets. It includes the debtor’s electronics goods, clothes, etc. The list of assets will have to be made by the debtor. It is the trustee who will review the assets and the liabilities. After revision, decision about dividing the debtor’s property, according to the applicable state law, will be taken. Normally, small assets are left for the debtor, so that he can start afresh.
What happens to the debt, after I have filed for bankruptcy?
A trustee is appointed for the case, after a debtor files for bankruptcy. The trustee reviews the list of the debtor’s assets and liabilities. From the assets of the debtor, the trustee divides the assets among the creditors, to settle the debt.
What does Chapter 7 bankruptcy discharge mean?
To gain insight into this, read this article, specially devoted to discharge.
After filing for bankruptcy, is all the property taken over and divided between the creditors or do I get any part of my property?
In most cases, the assets of the debtor are divided between the creditors. The remaining assets are handed over back to the debtor, to make a fresh start. In most cases, the debtor doesn’t get any assets for himself.
Does filing for bankruptcy have any effect on the debtor’s credit rating?
After filing for bankruptcy under Chapter 7, the details of it stay on the debtor’s rating for 10 years from the date it was filed.
Is filing for blue island IL Bankruptcy voluntarily or involuntarily, according to bankruptcy rules? Can the creditors force bankruptcy against a debtor?
Filing for Chapter 7 bankruptcy is voluntary. The creditors cannot force bankruptcy on a debtor. Take a look at bankruptcy rules for details.
How does one file for this type of bankruptcy?
When one has to file for bankruptcy, there are certain measures, which need to be taken.
Hope this exhaustive FAQ list was an enlightening read.
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