What Is Chapter 7 Bankruptcy?

In the United States there are a number of ways to file for bankruptcy, these ways are called “Chapters.” Chapter 7 bankruptcies are the simplest of them all; it requires the debtor to liquidate the greatest majority of his or her assets, the creditors are then given the proceeds from the sale of the assets. A Chapter 7 bankruptcy lawyer in Royal Palm Beach will work with the client to ensure that at the end of the process most of the debts are discharged and the bankrupt can get a new start. Although Chapter 7 is most often used by individuals it can also be used by small and medium businesses.

 

To begin the process the Chapter 7 bankruptcy lawyer in Royal Palm Beach, along with the client file a number of documents with a bankruptcy court. The debtor must prove to the court that they are not eligible to file for a different Chapter which includes debt reorganization and they have to attach a list of all their assets. Once the court reviews the documents they will either agree to liquidation or force the bankrupt to reorganize. If the court agrees to Chapter 7 a meeting with the creditors is scheduled, in this meeting the debtor and the creditor discuss the assets that can be liquidated. Normally the creditors agree to taking a partial repayment of the debt they are owed but they do not have too. If a creditor believes the debt was related to any fraudulent activity they can refuse to settle. There are certain debts, student loans being one of them that must be paid in full.

 

The whole process can last from four to six months and during this time there can be a number of complications that the Chapter 7 bankruptcy lawyer in Royal Palm Beach will attend to. During this time certain assets are declared as exempt which means that cannot be included in the asset sale, in other cases the creditors may decide that certain assets are not worth anything, they are by default considered to be exempt as well. A trustee of the court is responsible for selling the remaining assets for as much as possible.

 

Part of declaring Chapter 7 bankruptcy is agreeing to attend credit counseling. It will prove to be quite difficult to obtain credit for several years and as it is not legal to file for bankruptcy again for a set time period, credit counseling can help the individual slowly rebuild credibility.

 

Bankruptcy is not something to be taken lightly but if it appears to be your only solution then you will need a Chapter 7 bankruptcy lawyer in Royal Palm Beach. You are invited to contact the Law Offices of Sean I. Koplow.

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