Chapter 7 Bankruptcy is fairly easy and considered by most lawyers to be the quickest solution to resolving debts that no longer could be paid. This "Liquidation" of debts owed is available to individuals, married couples and most businesses across the United States. The procedure involves trustees being hired by the court of law to gather pertinent information pertaining to the possessions in inquiries. From that time, the trustee in charge of the situation will decide which items may be listed as non-exempt for selling purposes. The assets are then sold and the amount that is garnered from the sales is used to settle debts with lenders that are owed.
Exempt property and what qualifies varies from state to state. There are also laws in place to prevent clients from moving to another state with larger exempt lists and exclusions during the bankruptcy procedures. Some items that have been notably used in the past consist of social security benefits, homes and business assets used for work. More often than naught, most chapter 7 bankruptcies come through the courts as no asset bankruptcy process. This exact type of bankruptcy is based upon the fact that the person or business filing has really little if nothing at all in terms of non-exempt property that the trustee may sell. This is very exact to each case and needs to be translated to the trustee immediately before process start rolling forward.
If an individual or corporation files, specific laws require that the debtor undergoes a "means test" to determine if qualifications are met for filing Chapter 7 bankruptcy. This permits the IRS and the government to properly screen applicants and decide who's eligible is how the IRS determines who could or cannot file. All income and fiscal costs are combed over thoroughly and compared to the standards set for the state by the Internal Revenue Service. An individual or married couple may file for chapter 7 if the total salary for the family is less than the standard median set by the state. If your salary is greater than that standard over a set amount of months prior to filing, than a court will dismiss the proceedings and ask that a chapter 13 bankruptcy be sought after so that a payment plan can be put into effect.
Chapter 7 bankruptcy officially starts with filing an official letter of intent declaring your financial status and petitioning for bankruptcy protection. A statement will also be submitted to the court declaring specifics regarding your lenders and their claims, your assets both exempt and non-exempt as well as your monthly salary and living costs. Once bankruptcy has been filed, creditors have no access to collection and your payments and loans are put on hold pending your case. If there is nonexempt assets listed amongst your belongings, the trustee designated by the court hearing your situation will take ownership of it. The trustees will then sell what could be sold of your non-exempt assets and obtain a figure presentable at court. Fees will first be paid to the trustee along with other court costs and then the amount left over will be used as payments towards the lenders with claims listed within your original statement.
