Taking a Closer Look at Chapter 7 Bankruptcy: One of the Most Common Filings
Also known as "liquidation," Chapter 7 bankruptcy is one of the two most typical types of bankruptcy filed by consumers. It is somewhat less complicated than Chapter 13 but, according to some viewpoints, less ideal as well. Whereas the person who files Chapter 13 bankruptcy has the comfort of keeping their assets while they reformulate and attempt to pay off their creditors over the course of several years, those who file Chapter 7 bankruptcy are forced to liquidate all their nonexempt assets.
Before taking monumental action and filing bankruptcy after reading a few articles online about it, you should first get some authentic advice from a real professional. Talk to a bankruptcy lawyer today and tell them your story. A bankruptcy lawyer worth keeping is one that shows concern about your situation and can put to use their extensive knowledge of bankruptcy so you can be positive you're handling your bankruptcy in the most effective manner possible.
How Chapter 7 Bankruptcy Works
Once you've retained a bankruptcy lawyer and are satisfied that Chapter 7 bankruptcy is the best option for you then the action starts. Your lawyer will file all the necessary paperwork and your creditors will be notified. They will then start lining up for payment as your nonexempt possessions are divided between them.
So what exactly is the difference between exempt and nonexempt assets? Well, your state has its own set of rules on what assets you can exempt from your bankruptcy settlement. These exempt possessions are yours to keep and cannot be touched by your creditors clamoring for payment. They consist of:
--Certain real estate
--Earnings from a life insurance contract
--Benefits from a judgment
--Social security, veteran's benefit, prescription health aids, handicap, illness, and/or jobless benefit
--And trade supplies necessary for you to make a living
All of your possessions that are not deemed exempt are then auctioned off with the proceeds going to your creditors. If you have multiple creditors and few nonexempt assets then you could be in for further legal troubles as the unhappy creditors remaining will likely take you to court in an attempt to get their hands on your exempt assets. Again, a quality bankruptcy lawyer will make positive your exempt assets are backed 100 percent by your state's rules. However, the creditors and their lawyers will sniff out any technicalities that could make your exempt possessions nonexempt.
Learn More About Chapter 7 Bankruptcy Today
It truly takes a professional to fully understand and interact Chapter 7 bankruptcy in its entirety. Contact a licensed bankruptcy attorney today and tell them your story. You could just find them to be helpful and you also might find that Chapter 7 bankruptcy mightn't be your only hope at a debtless future.
Related Links:
Chapter 13 Bankruptcy Protection Personal Bankruptcy
