Chapter 7 Bankruptcy Information
This website is dedicated to providing bankruptcy information on the various bankruptcy filing options available.The critical difference with filing chapter 7 bankruptcy in contrast to chapter 13 lies in the fact the former does not require filing a of a repayment plan. Instead, the bankruptcy trustee sells any debtor’s nonexempt assets. Certain states such as Texas provide for homestead exemptions. The proceeds are then used to pay creditors in accordance with the provisions of bankruptcy laws.
Consequently the debtor’s property may be subject to liens or mortgages pledging the property to creditors. The most important issue then is realizing that a loss of property of property may result. Chapter 7 bankruptcy may be something to seriously consider in cases where the debtor has no real assets. A case wherein a business owner, who rents a home or apartment, has invested all their assets into their business and acquired personal loans for it is a perfect example. Should the business fail, the business owner has no real assets that can be sold off. As devastating as this scenario might be, this type of bankruptcy may be a helpful option.
The Chapter 7 option also allows an individual, a partnership, or a corporation or other business entity to file. This option also provides potential relief regardless of the amount of the debts in question. Solvency is not an issue. As in the case of chapter 13, an individual or entity is excluded from this if the part has failed to comply with court orders during the last one hundred and eighty days. The exclusion also applies to those individuals who have voluntarily removed themselves from the proceedings in the same time period. Credit counseling from approved credit counseling agencies is a requisite.
While each case is different and attorneys should be consulted, this course offers the individual debtor the possibility of discharging debts in their entirety. This removes liability for discharged debts in many cases. Different rules may apply to partnerships or corporations. The removal of tax liability is also something to consider when reviewing this type of bankruptcy. There are a variety of requisites for IRS debt to be included and discharged and this should be investigated as an option.