Chapter 7 bankruptcy also referred to as ‘straight bankruptcy’ is a situation where the debtor hands over all their surviving property to a bankruptcy trustee. It is converted in to cash by the trustee in order to allocate amongst the creditors. The debtor in the case of a chapter 7 bankruptcy receives a release of all dischargeable debts within approximately four months. Theories aside, many people who claim chapter 7 bankruptcy have relatively no large assets to lose as they have lost it all . This therefore is a means that would enable the bankrupted party a new beginning.

In order to be eligible to file for chapter 7 bankruptcy, the debtor must be an individual, partnership or corporation or other business unit. A sole individual though cannot file under chapter 7 bankruptcy information. If the debtor receives credit counselling within 180 days from an approved agency, some exceptions are made. A chapter 7 bankruptcy is only issued after the debtor fills out a petition with the bankruptcy court regarding their assets. In addition to this the debtor must also file a schedule of assets and liabilities, a schedule of current income and expenditures and a statement of financial affairs with the court .
The main reason for bankruptcy is to give an honest individual a new beginning. Debtor therefore is not legally discharged for the liabilities. In the case of discharging under chapter 7 bankruptcy, it should be known that it is only an option for individual debtors as opposed to the previously mentioned scenario. Though this is the general procedure, an individual’s right of discharge is not to be taken for granted as some categories of debts are not discharged.

In order to file for a chapter 7 bankruptcy it is essential that you first speak with a qualified attorney and figure out what the best choice for you is. First though you need to figure out for yourself if you actually need to file for bankruptcy. Online evaluation forms are also available. Always make sure that you provide your attorneys with complete and correct information to gain a better evaluation on your case. It is also essential to remember that the debtor receives a discharge on all dischargeable debts in chapter 7 bankruptcy. Therefore though in some cases this would mean losing all ones assets, in the majority of cases, this isn’t so. Therefore it is essential that you have a bankruptcy attorney before making any rash decisions.

Popularity: unranked [?]

(No Ratings Yet)

 Loading ...

 |  Email It  |  Print It  |  Subscribe to It!
This entry was posted on Friday, August 27th, 2010 at 12:05 am and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.