The Filing Process for Chapter 7 Bankruptcy

Article Written By: Michael F

Bankruptcy has become a common word among financial and domestic circles these days. With recession and financial instability doing the rounds, it is natural that people are terrified and uncertain of their next step. But it is essential to have knowledge of the procedure of its filing in court and in legal establishments. Bankruptcy is defined as the legal procedure of handling debt problems of an individual or an establishment.

Filing for chapter 7 bankruptcy is not the most ideal situation for any individual, but it is definitely a better and more viable option than others. Technically termed as Liquidation under the code, chapter 7 bankruptcies are available to a range of financial accounts like individuals, corporations and partnerships.

The individual can discharge the majority of the debt while protecting some property from being seized. This is done by selling non exempt properties. Bankruptcy exemptions may vary from state to state and should be clarified beforehand. The debtor is asked to produce a credit list that contains all his dues even the non-dischargeable ones. Although, student loans, child support and legal fines are some of the debts that are not exempted or discharged in the procedure.

The bankruptcy is official once the bankruptcy attorney files in the petition. The court then appoints a trustee who oversees the sale of non exempt property and uses the revenue to discharge the debts owed. It allows a period of 2 years before the debtor can apply for any mortgages, but it depends on various external factors too and cannot be guaranteed.

One important reason why many people chose Chapter 7 is that it is relatively easier than chapter 13 repayment plan. Most effective bankruptcy filings are closed in within 3 to 6 months of the filing with the debtor being declared clear of all debts, except mortgages and car payments and non-dischargeable debts. There is also a facility that enables chapter 13 filers to convert to a chapter 7 plan if unable to repay the amount owed.

Filing for a chapter 7 bankruptcy is not an easy process, it is advised that one should consult an established law firm and use their legal expertise in order to file the documents properly and avoid any further implications. It is advisory that debtors choose to employ the services of trusted and known bankruptcy lawyers and law firms for advice and proper guidance.

These law firms can also help the debtor to chart out a post filing plan and offer credit counselling and management programs to help him plan the future. It is essential that a debtor does not hurry into the filing of a bankruptcy and must do so under the thorough guidance and advice of a trusted attorney.

About the Author

Michael Fredrick - Find more information about Bankruptcy filing laws at the Law firms.

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