Chapter 7 Bankruptcy Law and You
Chapter 7 Bankruptcy Versus Chapter 13 Bankruptcy
There are two forms of bankruptcy for individual use. They are Chapter 7 bankruptcy and Chapter 13 bankruptcy. In Chapter 13, a debtor sets up a Plan for repayment of debts, and then makes monthly payments that are paid proportionately to creditors. These payments continue for up to five years. At the end of the payment Plan, a discharge is entered to eliminate unpaid debts. Those debts are not repaid. Chapter 13 allows for correction of defaults on secured debts such as mortgages and car loans. Most commonly, Chapter 13 is sought by people whose homes are being foreclosed upon by mortgage creditors, and it allows for past due mortgage payments to be paid over the life of the Plan, while regular mortgage payments are continue or reinstated. This is the most notable use of Chapter 13.
Chapter 7 Bankruptcy also Called Liquidation Bankruptcy
Chapter 7 bankruptcy is also known as liquidation bankruptcy. In exchange for a discharge of debts that cannot be paid, a debtor's property is liquidated, with the proceeds being paid to creditors. Debts remaining unpaid after this exchange are discharged or eliminated. This is the theory of Chapter 7 bankruptcy, but generally a debtor does not actually lose any property because most things that people own are classified as exempt. Exempt property is protected from creditor claims. This includes property such as equity in a home, up to a certain amount, a car, with the debtor's interest being worth up to a certain amount, retirement accounts, bank deposits, up to a certain amount, and household goods, worth up to a certain amount. These are considered essential items and are protected for a debtor.
Filing Chapter 7 Bankruptcy
Chapter 7 is a fairly simple form of bankruptcy. A case is commenced with the filing of a set of documents pertaining to a debtor's finances. Documents list property owned by a debtor, debts, income, expenses, and details about a debtor's financial history. The filing fee for Chapter 7 at this time is $299. After a case is filed, a meeting will be held after approximately thirty days. This is called the First Meeting of Creditors, and it is technically a hearing that follows a legally prescribed procedure. The meeting is presided over by the Bankruptcy Trustee, an officer appointed by an agency of the government to oversee bankruptcy cases. The purpose of the meeting is to allow creditors to appear and examine debtors under oath. In fact, it is unusual for creditors to appear at Chapter 7 meetings, although in some cases they do. If a creditor does appear, the creditor may question a debtor about various aspects of the filing. This questioning would be fairly limited, and if a creditor were intending to mount some challenge to a filing, it would be done in a court proceeding and not at this meeting. The trustee will also ask the debtor questions about his or her filing, but generally these questions are by rote. The same questions are asked of most or all debtors attending a meeting.
Chapter 7 Bankruptcy Discharge
It is rare in Chapter 7 for a debtor to appear in court. Normally, a debtor's only appearance is at the Creditor's Meeting. If the trustee is satisfied with the debtor's responses to questions, and there are no challenges lodged by a creditor, a discharge will be entered approximately three months after the Creditor's Meeting. Discharged debts are no longer owed by the debtor. The discharge is mailed to the debtor, and the debtor has no further involvement in the case. The case is essentially over at that point. A Chapter 7 bankruptcy will remain on a debtor's credit report for ten years. Also, only one Chapter 7 discharge can be given to a debtor every seven years.
Peter Wendt is a writer and researcher living in Austin, Texas. He recommends you check out bankruptcy lawyers Riverside and bankruptcy attorney Riverside.
http://www.bankruptcyattorneypros.com/
There are two forms of bankruptcy for individual use. They are Chapter 7 bankruptcy and Chapter 13 bankruptcy. In Chapter 13, a debtor sets up a Plan for repayment of debts, and then makes monthly payments that are paid proportionately to creditors. These payments continue for up to five years. At the end of the payment Plan, a discharge is entered to eliminate unpaid debts. Those debts are not repaid. Chapter 13 allows for correction of defaults on secured debts such as mortgages and car loans. Most commonly, Chapter 13 is sought by people whose homes are being foreclosed upon by mortgage creditors, and it allows for past due mortgage payments to be paid over the life of the Plan, while regular mortgage payments are continue or reinstated. This is the most notable use of Chapter 13.
Chapter 7 Bankruptcy also Called Liquidation Bankruptcy
Chapter 7 bankruptcy is also known as liquidation bankruptcy. In exchange for a discharge of debts that cannot be paid, a debtor's property is liquidated, with the proceeds being paid to creditors. Debts remaining unpaid after this exchange are discharged or eliminated. This is the theory of Chapter 7 bankruptcy, but generally a debtor does not actually lose any property because most things that people own are classified as exempt. Exempt property is protected from creditor claims. This includes property such as equity in a home, up to a certain amount, a car, with the debtor's interest being worth up to a certain amount, retirement accounts, bank deposits, up to a certain amount, and household goods, worth up to a certain amount. These are considered essential items and are protected for a debtor.
Filing Chapter 7 Bankruptcy
Chapter 7 is a fairly simple form of bankruptcy. A case is commenced with the filing of a set of documents pertaining to a debtor's finances. Documents list property owned by a debtor, debts, income, expenses, and details about a debtor's financial history. The filing fee for Chapter 7 at this time is $299. After a case is filed, a meeting will be held after approximately thirty days. This is called the First Meeting of Creditors, and it is technically a hearing that follows a legally prescribed procedure. The meeting is presided over by the Bankruptcy Trustee, an officer appointed by an agency of the government to oversee bankruptcy cases. The purpose of the meeting is to allow creditors to appear and examine debtors under oath. In fact, it is unusual for creditors to appear at Chapter 7 meetings, although in some cases they do. If a creditor does appear, the creditor may question a debtor about various aspects of the filing. This questioning would be fairly limited, and if a creditor were intending to mount some challenge to a filing, it would be done in a court proceeding and not at this meeting. The trustee will also ask the debtor questions about his or her filing, but generally these questions are by rote. The same questions are asked of most or all debtors attending a meeting.
Chapter 7 Bankruptcy Discharge
It is rare in Chapter 7 for a debtor to appear in court. Normally, a debtor's only appearance is at the Creditor's Meeting. If the trustee is satisfied with the debtor's responses to questions, and there are no challenges lodged by a creditor, a discharge will be entered approximately three months after the Creditor's Meeting. Discharged debts are no longer owed by the debtor. The discharge is mailed to the debtor, and the debtor has no further involvement in the case. The case is essentially over at that point. A Chapter 7 bankruptcy will remain on a debtor's credit report for ten years. Also, only one Chapter 7 discharge can be given to a debtor every seven years.
Peter Wendt is a writer and researcher living in Austin, Texas. He recommends you check out bankruptcy lawyers Riverside and bankruptcy attorney Riverside.
http://www.bankruptcyattorneypros.com/
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