How to File For Chapter Seven Bankruptcy
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.
Certainly no one wants to become involved in bankruptcy proceedings. Anyone who does will have to have debts that greatly exceed his or her net worth and, in addition, have no visible or viable means of paying back the debts.
There are a number of different forms of bankruptcy such as chapter 11 bankruptcy and the more common chapter 7 bankruptcy. Since chapter 7 bankruptcy is more common for individuals, it is the one we will focus on here.
Defining chapter 7 bankruptcy for all
According to the law and the United States court system, Chapter 7 bankruptcy refers to liquidation of assets that are not legally exempt from liquidation in order to pay off creditors and debtors.
If you are a corporation, business and or partnership you will also be able to apply for this chapter like an individual. Chapter 7 bankruptcy is however different for individuals in that they have open to them a special extra clause in the bankruptcy filing framework.
This extra clause for the individual is commonly known as a discharge. In essence what this discharge entails is the opportunity of freeing the individual from a host of certain debts.
The first things to do when filing chapter 7
Generally speaking to file a chapter 7 bankruptcy one mast supply the courts with copies of their tax returns, contracts of an executive nature, statements of financial affairs, all proof of liabilities and assets as well as documents to prove one’s current income and necessary expenses.
For the public there are a series of additional items that are necessary. They will include but are not necessarily limited to the following: copies of your reports for credit counseling as well as any payment plan programs, statements of income/employee payments and in the case of being a student, copies of documents stating interest payments on one’s student loans.
If you are in a situation where filing chapter 7 bankruptcy or any other bankruptcy type is a necessity, make sure you take a visit to the US courts website. Also make sure that if you do need to take action in the way of a bankruptcy proceeding you get a good professional lawyer to deal with your case.
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