Chapter 7

What is Chapter 7 Bankruptcy

Chapter 7 Bankruptcy, a type of bankruptcy, is a solution for individuals and business owners to get a fresh start by liquidating assets and discharging unsecured debts. This allows a debtor to emerge out of a financial crisis anew and start over without the stress and hassle of collector and creditors garnishing wages, applying liens or any other method of collection action. A Chapter 7 bankruptcy is ideal for those you have recently lost a major source of income and have little or no personal wealth or assets to be liquidated. Once a Chapter 7 bankruptcy has been filed, and immediate stay is grated that prevents any creditor from contacting you or trying to make a collection by any means. If a creditor continues to try and collect, they are subject to fines which are enforced by a federal court.

A Chapter 7 bankruptcy is the most commonly filed type of bankruptcy in Florida. Also known as the straight bankruptcy or the liquidation bankruptcy, it is one of the quickest methods used to start over and release a debtor from their financial obligations. When you file for a Chapter 7, a trustee is appointed to your estate and will collect all non-exempt assets you may possess. However, your home, vehicle and many personal assets are not subject to liquidation and are protected by the constitution.

Filing for Bankruptcy Chapter 7 - step by step process

Filing Chapter 7 bankruptcy can be a complicated process. Step number one is to certainly retain the counsel of a Bankruptcy lawyer so you fully understand your rights and options. Don't go it alone, it can be a massive set back to have your bankruptcy dismissed and typical bankruptcy lawyer fees are not that high in a standard case. In your first meeting with your lawyer you'll go over all of the aspects of your current debt, financial situation, income, expenses and assets. This will give your bankruptcy attorney most of the information needed to asses which type of bankruptcy to file, or if declaring bankruptcy is even needed at all.

The next step, and sometimes even before your first meeting, you'll need to complete a required credit counseling course. This course helps you understand more about debt management and can be complete within an hour online. You'll then receive a certificate of completion that will e submitted with your bankruptcy filing. You'll also need to complete a full statement of monthly income which needs to fall beneath the required test to qualify for a bankruptcy. This is an average income of the previous 6 months of your earnings. In addition, you'll also be provided a full creditor list for the debt you own, your month expenses and any property or assets that you own.

Prior to your actually bankruptcy meeting you'll need to complete a bankruptcy personal financial management course where you'll verify your information as being accurate and truthful. After the entire process, your attorney will receive a letter fro the trustee that your debt has been discharged.

What happens after filing Chapter 7

There are downsides you should consider before filing any type of bankruptcy. A Chapter 7 will stay on your credit for up to 10 years and at the time of your filing, most of your revolving credit with banks in the form of credit cards, will be closed. A bankruptcy is available to any individual or business owner who passes a required means test. This is a test used to prevent fraudulent bankruptcy filings and to ensure those asking for relief, truly need it. Once you find a qualified bankruptcy lawyer, they will go over every aspect of qualification with you. In most cases, you should know by the end of your free bankruptcy consultation what the chances are to qualify for bankruptcy and which type of filing you should do.

By filing a Chapter 7, all collection efforts against you will stop immediately. There is a stay placed on your entire financial identity which is enforced by a Federal court. There are several types of property that are completely exempt from liquidation. These include a residence, material used specifically for your trade skill, items specific to your health, certain retirement benefits such as social security, veteran, disability or employment wage benefits.

Considering Chapter 7: who can file Chapter 7 Bankruptcy

A Chapter 7 bankruptcy is a straight liquidation of your current assets to pay off unsecured debts owed to creditors. A Chapter 7 bankruptcy allows you to keep various personal property assets like a home, car and various other personal items. To find out exactly how a bankruptcy will effect you, retaining the services of an experienced bankruptcy attorney is your absolute best option.

Chapter 7 tends to be the simplest way for consumers to resolve their debts — many are able to resolve their cases in a matter of months and hold on to their property when it’s all over.

Some property is exempt from getting taken in a Chapter 7 proceeding — courts cannot debtors to sell their clothes, their automobiles or their household appliances and furniture, nor can they seize money paid out through public assistance programs.

But courts can force debtors in Chapter 7 proceedings to sell second cars or homes, valuable collections, money in a bank account over a certain amount and stocks and other investments.

For the reasons listed above, filing Chapter 7 bankruptcy in Florida is commonly referred to as a straight bankruptcy or a liquidation bankruptcy. It quite simply allows a debtor to relieve themselves of unsecured debts and start their financial life over. When filing for a Chapter 7, you'll be required to provide a list of all creditors along with the amounts you currently owe, your full income, a complete list of any property assets you own and a very exact explanation of your monthly expenses.

The best candidates for a chapter 7 are known as no-asset cases where you have debt you can't repay and no tangible net worth to be liquidated. This is not to suggest that assets can be hidden though, in fact doing so is a violation of Federal law and you'll end up in jail for doing so. The most important first step you can make is to contact a bankruptcy lawyer immediately if you're considering filing any type of bankruptcy.