Some Important Facts Regarding Chapter 7 Bankruptcy
Whenever one person wants to get out of bankruptcy with the purpose of clearing one’s financial mess and have a new start, then filing Chapter 7 bankruptcy may surely be the best option to consider. This is because of the fact that Chapter 7 bankruptcy (as taken from provisions stated in Chapter 7 of the Bankruptcy Code) provides that the debtor is only required to sell all of the properties that is not exempt, and that all of the proceeds would all be divided among the creditors. In this case, unlike other types of bankruptcy, Chapter 7 makes a debtor save his assets and start a new financial life. Of course, it is relatively easier for one to rebuild finances when essential assets are kept is place, as compared to other situations wherein even critical assets must be liquidated. This is the reason why a lot of debtors would like to file a bankruptcy as much as possible. However, filing for this kind of bankruptcy is not easy, and there are a lot of legal requirements that must be met. In this case, looking for a credible bankruptcy attorney may help a lot. It is a good thing when one personally knows a bankruptcy attorney; but if this is not the case, then looking for one would surely be needed.
Chapter 7 bankruptcy is also most common type of bankruptcies filed in the United States. Every year, almost 65% of all consumer filings in this country involve Chapter 7 filings. This type of bankruptcy is also commonly called as liquidation. The good thing about filing Chapter 7 bankruptcy is that the debtor may already be cleared from his debts within months, especially when there are no pending complaints and objections from all of the different parties involved in the case.
Usually, Chapter 7 bankruptcy requires a trustee to be appointed. The trustee would then be primary responsible for collecting all of the properties of the debtor which are not exempt, and in liquidating the said properties. In addition, it is also the trustee who will be primarily responsible for turning over all of the proceeds of the sale to the creditors involved in this bankruptcy case. Another good thing in this type of bankruptcy is that the debtor is not required to pay the trustee any sum. This is unlike other types of bankruptcy, where the debtor is usually required to pay an amount to the trustee. Therefore, having the privilege to file Chapter 7 & bankruptcy saves the debtor a lot of money.
There are also times wherein the debtor may feel that a lot of his/her assets may be liquidated, making it harder for him/her to start a new financial life. Whenever one has doubts, it is safe for them to consult their respective bankruptcy attorneys. By doing this, one can see the entire legal basis on why such assets would be liquidated. In addition, consulting bankruptcy attorneys would also make one see if there were legal excesses involved in the process.