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Defining Chapter 7 Bankruptcy So We All Understand It
Filed under BankruptcyNov 2You hear the term chapter 7 bankruptcy quite a lot these days, however normally a proper explanation of exactly what it is is not included. Every day people make mistakes when filing for bankruptcy that probably could have been avoided if they had better understood the different types of bankruptcy.
Having to go through the proceedings necessary in bankruptcy is the last thing people want to do. Naturally the idea of being in a situation where your debts are worth more than what you earn is not very popular, but neither the less if you find yourself in this predicament, learning the process of Filing For Chapter seven Bankruptcy obviously is 100% necessary!
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.
The Definition Of Chapter 7 Bankruptcy: According to the law and the United States court system, Chapter 7 bankruptcy refers to liquidation of assets that are not legally exempt from liquidation in order to pay off creditors and debtors.
If you are a corporation, business and or partnership you will also be able to apply for this chapter like an individual. Chapter 7 bankruptcy is however different for individuals in that they have open to them a special extra clause in the bankruptcy filing framework. The special clause for the public is called a discharge. What a discharge refers to is the freeing of the individual from certain debts.
Now let’s begin with the all important question How To File Bankruptcy in the case of chapter seven
Generally speaking to file a chapter 7 bankruptcy one mast supply the courts with copies of their: proof of your full income as well as expenditures, proof of your existing liabilities and assets, statements for your financial affairs, copies of any expired executive contracts, and of course copies all your tax returns.
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 statements of income and or employee payments, credit counseling reports etc, also students will need to supply documentation for interest payments on 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. However, remember filing for Chapter 7 protection by yourself is not advised, you should get professional help from a lawyer.
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