Defining Chapter Seven Bankruptcy for All

Posted by George Jones

October 26, 2008

by John Alice

We have all heard of chapter 7 bankruptcy, although many of us if asked probably could not give a precise answer to what exactly it entails. Every day people make mistakes when filing for bankruptcy that probably could have been avoided if they had better understood the different types of bankruptcy.

Having to go through the proceedings necessary in bankruptcy is the last thing people want to do. However if their debts add up to more than what they have coming in sometimes this is unavoidable.

Numerous kinds of bankruptcy proceeding exist including but not limited to chapter 11 and chapter 7. In this article our focus is going to be on chapter 7 since this is more for individuals.

The Definition Of Chapter 7 Bankruptcy

Chapter 7 bankruptcy as defined by US and its courts law refers to the action or liquidating not legally exempt from liquidation assets with the desired outcome of paying back creditors and debtors alike.

Chapter 7 is an option open to individuals, businesses, partnerships and corporations. There is, however, a special clause open to the individual within the framework of this chapter filing that is not available to the other entities.

The special clause for the public is called a discharge. What it basically means is that the public are able to free themselves totally from some of their debts.

The first things to do when filing chapter 7

On a baseline level, those filing for Chapter 7 must provide copies of tax returns; executed contracts and leases that have been expired; financial affairs statements; proof of assets and liabilities; and copies/schedules of current expenditures and income.

For individuals there are additional items that must be provided to the court as well. These items include copies of credit counseling reports and repayment plan programs, employer payments and statements of income, interest payments on student loans, etc.

This is, of course, a brief overview and more detailed information is provided by the government and federal courts at the website uscourts [dot] gov. However, remember filing for Chapter 7 protection by yourself is not advised, you should get professional help from a lawyer.

About the Author:

Filing For Chapter Seven Bankruptcy needs like any bankruptcy that one knows How To File Bankruptcy properly 1st. See the links here for help.

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