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 sell off all their nonexempt possessions.
Before taking monumental action and filing bankruptcy following reading a few articles online about it, you should first get some authentic advice from a real professional. Talk to a bankruptcy attorney 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 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’ll then begin 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 possessions 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
--Benefits from a life insurance contract
--Proceeds from a judgment
--Social security, veteran's benefit, prescription health aids, disability, illness, and/or unemployment benefit
--And trade supplies necessary for you to make a living
All of your assets that aren't 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 unsatisfied 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 sure your exempt assets are backed 100 percent by your state's laws. However, the creditors and their attorneys will sniff out any technicalities that may make your exempt assets 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 lawyer today and tell them your story. You could 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.
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