Defining Chapter 7 Bankruptcy For All Of Us
The term “Chapter 7 bankruptcy” is a term that is thrown about a great deal in the media, but clear and concise explanations of the term are usually not offered. 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, however regardless of this if you find yourself in this predicament, making sure you understand the process of Filing For Chapter 7 Bankruptcy obviously is 100% required.
Numerous kinds of bankruptcy proceeding exist including but not limited to chapter 11 and chapter 7. 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.
Businesses/partnerships/corporations and individuals can apply for a chapter 7 bankruptcy. There is, however, a special clause open to the individual within the framework of this chapter filing that is not available to the other entities.
This extra clause for the individual is commonly known as a discharge. What a discharge refers to is the freeing of the individual from certain debts.
Right let’s get started with How To File Bankruptcy when trying to get chapter 7: On a baseline level, those filing for Chapter 7 must provide: copies of tax returns; executed contracts and leases that have been expired; financial affairs statements; proof of assets and liabilities; and copies/schedules of current expenditures and income.
For individuals there are additional items that must be provided to the court as well. They will include but are not necessarily limited to the following: copies of your reports for credit counseling as well as any payment plan programs, statements of income/employee payments and in the case of being a student, copies of documents stating interest payments on one’s 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. If you do file for bankruptcy make sure you get a good lawyer.