Understanding Chapter 7 Bankruptcy
Written by ady on June 19, 2009 – 8:20 am -Too much debts? If the debts are overwhelming, the hardest part could be filing for bankruptcy. A lot of people like file Chapter 7 Bankruptcy. This chapter involved selling all your non-exempted assets which can be a chance to pay all your debts. This chapter is supervised by the authority and the authority will appoint a a person known as a trustee to liquidates the non-exempt assets of the defaulter and use the sales proceeds to pay off the various creditors. Exemptions are properties that cannot be sold when filing for bankruptcy. It is true that chapter 7 tend to favor the debtors more and with the help of exemptions, a debtor could effectively reduce your personal liability and keep some personal belongings.
The debtor will review the state exemption list given to the debtor and learn which property to keep. This list is found in the Federal Bankruptcy Code. The property shall be declared as exempt or non-exempt when a property exemption report is filed by the trustee. The exemptions are not across the board and the law can be very different in some states, but the basic laws should remain the same.
Debts that are classified as secured debts will be paid first. As for debts that are unsecured, it can be possible that the creditors of unsecured debts may not get the full payment. The trustee is authorized to decide who gets the payment first, based on the law. In order to get bankruptcy chapter 7 exemptions, the debtor must file the case in the state where he/she lived for at least 730 days before he/she can file for this type of bankruptcy. Alternatively, the defaulter may also file the case in a state where the debtor has spent most of the 180 period prior to the 2-year period.
There are some Federal exemptions and they can include retirement benefits, death disability benefits, survivor’s benefits and miscellaneous. You should find out more about the Federal exemptions because not all the states are the same.
This is most probably the worst form of bankruptcy, your credit score will drop a lot because of a filing of bankruptcy. Not only you will lose all your personal belongings and you need to start your business all over again from nothing. Always keep in mind that bankruptcy should be your last option.
However, if in a worse case scenario, then get to find out more about bankruptcy chapter 7 exemptions as you can lower your personal loss and use the law to help you get back your life as soon as possible.
Tags: bankruptcy
Posted in Bancruptcy |