Chapter 7 is the most used section of the bankruptcy code. Over half of the bankruptcies filed for in the United States are filed under Chapter 7. In chapter 7 as the debtor you must surrender your non-exempt property to a bankruptcy trustee. A
bankruptcy trustee is usually an attorney appointed by the court. His duty is to distribute the funds as required by law. The trustee will liquidate the property; after the property is liquidated he will divide it among the unsecured creditors whom are owed money. The proceeds the trustee receives from the sale of the property will not be enough to pay all the debts, so the trustee will negotiate to reduce the amount owed.
Chapter 7 Bankruptcy and your Assets
It is very important that as a debtor you are honest about your assets when filing for
chapter 7 bankruptcy. This is because if you attempt to hide property the court can refuse to discharge the debt. You may only file for Chapter 7 relief once every eight years.
What isn't discharged with a Chapter 7 Bankruptcy
There are some debts which are not discharged during bankruptcy. The most common are student loans, child or spousal support payments, and some tax payments. Some property is exempt from liquidation. Usually this is clothes and household goods or a car which is older but not very valuable. These exempt items vary from state to state.
Secured creditor’s right to the collateral property usually continues despite the fact that the debt is discharged. This means for instance if you have a car that you are purchasing on payments, regardless that the debt has been discharged by the court, the creditor can still repossess the car in which he has a collateral property interest. If you wish to keep the car you must reaffirm the debt and continue making the payments, if you do not wish to keep the car, you must surrender it.
Okay, I Know the basics of Chapter 7, but how much does bankruptcy cost
The Price of Bankruptcy varies. Which is why we offer Free initial consultations. That way we go over your assets, such as income amounts and amount of creditors. Rest assured our bankruptcy prices are very competative. When you call to schedule a free initial bankruptcy consultation you speak with an attorney that will answer any bankruptcy questions that you may have.