This form of financial relief may be available to individuals, couples, corporations, and partnerships. Additionally, your income and expenses are evaluated to determine your eligibility.
Chapter 7 bankruptcy filers are required to receive both credit counseling and a budget analysis. This clarifies your circumstance. The majority of candidates employ an attorney who specializes in this field to assist them in obtaining the necessary information.
Ways to File
Your attorney will assist you in preparing an official petition, a schedule, and an official financial statement, all of which will be submitted to the court. This information comprises the following items:
- A list of your current creditors, including the nature of their claims and the total amount you owe them
- Your source of income, quantity earned, and frequency of earnings - - Your monthly budgeted list of living expenses - A list of all the property you presently own
An advantage of filing for chapter 7 bankruptcy is the order that prohibits creditors from contacting you about payments. This is referred to as a ""automatic stay,"" and it protects you from creditor calls and prospective lawsuits.
A Trustee is established
A fiduciary is appointed as your case's administrator as part of the process. He will handle the majority of matters outside the courtroom. The trustee has access to all of your property with the exception of exempt items. Exempt property can consist of:
- Your current residence or other real estate - Professional tools or books used in your trade - Unmatured life insurance contracts - Prescriptions or medically-required health aids
- Benefits such as Social Security, veteran's benefits, disability, illness, or unemployment - Funds awarded to you as a result of a lawsuit
Your trustee will take control of any non-exempt assets, and he will commence working on your case. Within the next forty days, your trustee will convene a meeting of creditors. You will be present to answer any concerns they may have regarding your current residence and your debts.
Reaffirming Debts or Acquiring Real Estate
You can negotiate with the creditor and continue making payments if you so choose. Within 45 days of the meeting, you must indicate whether you wish to continue making payments or repay the loan in full. Due to their limited financial resources, chapter 7 bankruptcy petitioners typically do not have access to this option.
If you choose to reaffirm a debt, the court must assess your income and expenses to ensure you can continue making payments.
Release from the Obligation
The typical aim of a bankruptcy petitioner is to be discharged from debt without having to pay anything. Once you are discharged, your debts are eliminated and you are permitted to start over financially.""
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