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Chapter 7 Bankruptcy
Bankruptcy Overview ♦ Chapter 7 ♦ Chapter 13 ♦ Chapter 11 ♦ FAQs ♦ Support and Prevention ♦ Foreclosure
Chapter 7 Bankruptcy
Individuals and businesses can file for Chapter 7 bankruptcy. In this case, a trustee is appointed on behalf of the debtor. After the debtor's "exempt" property is determined, the rest is liquidated or sold in order for the trustee to pay the creditor, thereby satisfying some or all of the debt.
To be eligible to file for Chapter 7 bankruptcy, the person or business must:
- meet income guidelines
- received credit counseling within 180 days of filing
- file debt management plans with the court if mandated by the credit counselor
There is a lot of paperwork involved in filing a Chapter 7 bankruptcy case. The individual or business must file the following documents with the court where he or she lives or conducts business.
- petition for bankruptcy (instructions)
- schedule or current income and expenditures
- statement of financial affairs
- schedule of assets and liabilities
- schedule of executory contracts and unexpired leases
- certificate of credit counseling
- a copy of any repayment planned developed by the credit counselor
- statement of monthly income and expenditures anticipated after filing
- record of any interest the debtor has in federal or state education or tuition accounts
Those filing for bankruptcy may not be able to pay the filing fees. A waiver of the fees can be applied for through this form.
Debtors must also provide the trustee with a copy of tax returns filed during the case and those not filed before the case began. Once the case commences, the trustee will meet with creditors and schedule repayments based on the debt's classification.
An individual debtor may seek discharge from Chapter 7 bankruptcy. A discharge will absolve the debtor from most remaining debts, except for child support, alimony, certain taxes, and education loans. The United States Bankruptcy Court advises that since there are many exceptions in being granted a discharge, the debtor should contact competent legal counsel before filing. Meeting with an attorney at the Coye Law Firm can help to negotiate the terms of being discharged from Chapter 7 bankruptcy and what responsibilities you will have if your request is granted.
