Dec 11 2008
Understanding How to File For Chapter 7 Bankruptcy
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. Because of this, there is some confusion as to what exactly chapter 7 bankruptcy actually is and this sometimes leads to people making critical errors when filing!
It is more than understandable that most of us will want to avoid getting into bankruptcy proceedings. Naturally the idea of being in a situation where your debts are worth more than what you earn is not very popular.
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. Chapter seven is more for individuals.
Chapter 7 bankruptcy explained
Chapter 7 bankruptcy as defined by US and its courts law refers to the action or liquidating not legally exempt from liquidation assets with the desired outcome of paying back creditors and debtors alike.
If you are a corporation, business and or partnership you will also be able to apply for this chapter like an individual. Chapter 7 bankruptcy is however different for individuals in that they have open to them a special extra clause in the bankruptcy filing framework.
This extra clause for the individual is commonly known as a discharge. In essence what this discharge entails is the opportunity of freeing the individual from a host of certain debts.
Filing Chapter 7 Bankruptcy
If you need to file for chapter 7 bankruptcy some of the things you will need are the following: proof of your full income as well as expenditures, proof of your existing liabilities and assets, statements for your financial affairs, copies of any expired executive contracts, and of course copies all your tax returns.
For the public there are a series of additional items that are necessary. They will include but are not necessarily limited to the following: copies of your reports for credit counseling as well as any payment plan programs, statements of income/employee payments and in the case of being a student, copies of documents stating interest payments on one’s student loans.
This is, of course, a brief overview and more detailed information is provided by the government and federal courts at the website uscourts [dot] gov. However, remember filing for Chapter 7 protection by yourself is not advised, you should get professional help from a lawyer.
