Chapter 7 Bankruptcy is fairly easy and considered by most attorneys to be the quickest solution to resolving debts that no longer may be paid. This "Liquidation" of debts owed is available to individuals, married couples and most businesses across the U.S. The procedure includes trustees being hired by the court of law to gather pertinent information regarding the possessions in questions. From that time, the trustee in charge of the situation will decide which items could be listed as non-exempt for selling purposes. The property is then sold and the amount that is garnered from the sales is used to settle debts with creditors that are owed.
Exempt property and what qualifies varies from state to state. There are also laws in place to prohibit 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 property used for work. More frequently then naught, most chapter 7 bankruptcies come through the courts as no asset bankruptcy process. This specific 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 could sell. This is really exact to each case and needs to be translated to the trustee immediately before proceedings start rolling forward.
If an individual or corporation files, exact 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 efficiently screen applicants and determine who is eligible is how the IRS ascertains who can or can't file. All income and fiscal expenses are combed over thoroughly and compared to the standards set for the state by the Internal Revenue Service. An individual or married couple can file for chapter 7 if the total income for the family is less than the standard median set by the state. If your income is greater than that standard over a set amount of months prior to filing, than a court will dismiss the process 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 details pertaining to your lenders and their claims, your property both exempt and non-exempt as well as your monthly income and living costs. Once bankruptcy has been filed, lenders have no access to collection and your payments and loans are put on hold pending your situation. If there is nonexempt property listed amongst your belongings, the trustee appointed by the court hearing your case will take ownership of it. The trustees will then sell what could be sold of your non-exempt possessions 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 creditors with claims listed within your original statement.
