The term “Chapter 7 bankruptcy” is a term that is thrown about a great deal in the media, but clear and concise explanations of the term are usually not offered. 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. Having to go through the proceedings necessary in bankruptcy is the last thing people want to do. Naturally the idea of being in a situation where your debts are worth more than what you earn is not very popular, however if you are in this situation learning what’s involved in Filing For Chapter 7 Bankruptcy obviously is one hundred percent needed.
There isn’t just one kind of bankruptcy proceeding, in fact there are a number including chapter 7 (the focus of this article) and Chapter 11.
The Definition Of Chapter 7 Bankruptcy: 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.
Businesses/partnerships/corporations and individuals can apply for a chapter 7 bankruptcy. There is, however, a special clause open to the individual within the framework of this chapter filing that is not available to the other entities.
This extra clause for the individual is commonly known as a discharge. What a discharge refers to is the freeing of the individual from certain debts.
Filing Chapter 7 Bankruptcy
If you need to get involved in chapter 7 bankruptcy some of the things you will need are the following: copies of tax returns; executed contracts and leases that have been expired; financial affairs statements; proof of assets and liabilities; and copies/schedules of current expenditures and income.
For individuals there are additional items that must be provided to the court as well. They will include but are not necessarily limited to the following: copies of statements of income and or employee payments, credit counseling reports etc, also students will need to supply documentation for interest payments on 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.
