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 common 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 luxury of keeping their assets while they restructure 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 possessions.
Before taking drastic action and filing bankruptcy following reading a few articles online about it, you should first get some authentic advice from a real expert. Talk to a bankruptcy lawyer today and tell them your story. A bankruptcy attorney 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 have retained a bankruptcy attorney and are confident that Chapter 7 bankruptcy is the best option for you then the action starts. Your attorney will file all the necessary paperwork and your creditors will be notified. They will then start lining up for payment as your nonexempt assets 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 assets are yours to keep and cannot be touched by your creditors clamoring for payment. They consist of:
--Certain real estate
--Proceeds from a life insurance contract
--Earnings from a judgment
--Social security, veteran's benefit, prescription health aids, disability, illness, and/or unemployment benefit
--And trade supplies essential for you to make a living
All of your assets that are not deemed exempt are then auctioned off with the proceeds going to your creditors. If you have multiple creditors and few nonexempt possessions then you might be in for further legal troubles as the unhappy creditors remaining will probably take you to court in an attempt to get their hands on your exempt possessions. Again, a quality bankruptcy attorney will make sure your exempt possessions are backed 100 percent by your state's laws. However, the creditors and their attorneys will sniff out any loopholes that may make your exempt possessions nonexempt.
Learn More About Chapter 7 Bankruptcy Today
It truly takes a professional to fully understand and communicate Chapter 7 bankruptcy in its entirety. Contact a licensed bankruptcy attorney today and tell them your story. You might just find them to be helpful and you also could find that Chapter 7 bankruptcy might not be your only hope at a debtless future.
