Just a few days ago, my friend Larry declared himself bankrupt. Things had not been going well for him since Sarah and he found themselves overwhelmed with the car and house loans and credit card payments. With recession hitting his employers hard, Larry found himself without a job.

Chapter 7 allows debtors certain exemptions:

Under Chapter 7 Personal Bankruptcy, the person’s assets are liquidated and the money is used to pay off debts. An assigned trustee decides which of the non exempt asset can be disposed off. This trustee is usually someone who knows the Bankruptcy laws. The trustee meets the creditors and the debtor within 40 days after filing of the case. A bankruptcy estate is created which consists of the debtor’s property- real estate, equipment, leases.

The payment to the creditors is done on priority basis which is laid down by the Bankruptcy Code. If the person is divorced and owes alimony or child support, then that is paid first.

The person is accorded certain exemptions according to Chapter 7. The debtor should be an individual, a partnership or a business who will have to undergo a “Means Test”. This test rules out people with high income from exemption. The debtor’s monthly salary should be below the state median. The trustee is not allowed to sell certain portion of the property. The person is allowed to keep some amount which is the difference between the amount owed and what the property is worth.

Chapter 7 bankruptcy is different for individuals and corporations:

Chapter 7 ends differently for individuals and businesses. Chapter7 bankruptcy sees the court issuing orders to let the individual forego their duty of repaying the loan. The individual is allowed to make a new beginning with their finances.

In case of a corporation, the property is liquidated and the business is shut down. A corporation gets no discharge from its debts. Chapter 7 bankruptcy is an option for businesses when they are hit badly and even a Chapter11 relief is out of the question.

Chapter7 allows discharge even when the debtor has no property after applying for exemption. Chapter 7 can also be called “No Asset Bankruptcies” since the person is left with no assets to pay their debts after exemption of their property. However, some debts, like child support, do not come under exemption. The Chapter7 Bankruptcy Code works differently for every case. A chapter 7 bankruptcy lawyer should be consulted.

Related Posts
Baha Mar Resort Enters Bankruptcy
Chapter 11 bankruptcy has been witnessed to provide an organization a relief from the heavy debts. Hence, it was not a surprise that the mega resort Baha Mar which was ...
READ MORE
Chapter 7 Bankruptcy
If you go for Chapter 7 bankruptcy, you may have a lot or all of your debts canceled. On the other hand, you might need to sell some or all ...
READ MORE
bankruptcy court
The United States is among the first country in the world that has the bankruptcy courts. They are first country to have a humane view of the person who has ...
READ MORE
Affordable Bankruptcy
Finding bankruptcy lawyers is easy now, submit your case details here and we will connect you to bankruptcy lawyers the way we did for following cases.   I have several payday loans ...
READ MORE
Filing for Bankruptcy
Hiring a lawyer to file for bankruptcy can be expensive, since the lawyer’s fees comprises of a huge chunk of bankruptcy expenses. However, filing for bankruptcy can be done by ...
READ MORE
How to file for Chapter 11 bankruptcy?
The gorgeous $3.5 billion paradisiacal mega resort Baha Mar is in the news again. Since its construction initiated, there are travelers waiting for it to start. However, it seems this ...
READ MORE
Stockton exit imposed losses on bondholders
The date of February 25, 2015 witnessed a new chapter in the life of the Stockton community. It was this day when the bankruptcy exit plan became effective. There were ...
READ MORE
Student loan defensible? some facts
Education is the paradigm for success. Students go for higher education in order to replenish their monetary requirements, for their safe future and a sound life. But, when you witness ...
READ MORE
Stockton chapter 9 Bankruptcy
Just like the organization, companies and individual can declare themselves bankrupt, so does a municipality can. The basic difference lies in the chapter, which will be filed to handle the ...
READ MORE
File Bankruptcy
Situations brings you financial crisis and break you upto bankruptcy. You might need to stop a garnishment, pay your debts, may be lost your job and have to support child ...
READ MORE
Baha Mar Resort Enters Bankruptcy
Chapter 7 Bankruptcy
Bankruptcy courts
Affordable Bankruptcy
Filing for Bankruptcy without a Lawyer
How to file for Chapter 11 bankruptcy?
Stockton exit imposed losses on bondholders
Student loan defensible? some facts
Stockton chapter 9 Bankruptcy
File Bankruptcy