Under the Bankruptcy Code, chapter 7 is a bankruptcy procedure offered to both individuals and businesses on filing a petition and all necessary declarations in connection with the debtor’s assets and income. You will find costs amounting to some hundreds of dollars associated with processing the petition. However, payment with installments can be arranged, permitting the debtor to extend payment up to 180 days. Chapter 7 is frequently, though not just, a voluntary option.

A precursor to filing a bankruptcy petition as an individual is credit counseling from a credit counseling agency that is operating with the appropriate approval. This counseling will need to have taken place within just 180 days of submitting the petition. In the scenario that there is a creation of a plan to deal with the debt, this plan must be made available when filing the required paperwork with the court.

Chapter 7 provides immediate relief for the debtor via putting a stop for a time to any sort of activity on the part of the creditors to recover the debt. In addition, filing a chapter 7 causes assets as being classed as exempt and nonexempt. Those classed as exempt, including mortgaged property, are not part of the liquidation process under chapter 7 being secured by other creditors.

As chapter 7 provides the liquidation of assets based on a prescribed hierarchy as a way to make certain the suitable return to unsecured creditors, filing a petition presupposes that this debtor will relinquish estate assets not guarded by exemptions, including property. While people can anticipate having a few or all their debts discharged, a measure which usually enables them to resume their lives, this isn’t available for businesses involved with partnerships or corporations. As expected, existing responsibilities which includes mortgages on property cannot be discharged.

Under chapter 7, a bankruptcy trustee will be assigned to deal with the disposal of nonexempt assets so as to understand the claims of creditors. These nonexempt assets might be money or property that is free of liens and capable of being sold.

The bankruptcy trustee sets up a meeting with the creditors identified by the debtor that the debtor can attend. At this meeting the debtor shall be put through questioning from both creditors and the trustee. When it comes to the creditors, the questions will probably have to do with financial concerns, including the debtor’s assets. The trustee, nonetheless, will be concerned to make clear legal matters relevant to creating a full disclosure for the court to be able to facilitate the discharge of debts.

If proof could be offered to the court that the debtor has adequate income, the debtor may choose reaffirmation of a specific debt, before discharge. In this instance, there is an arrangement made between the debtor and creditor to get through the debt that permits the debtor to retain possession of the property and restructure payments.

Also, when it comes to individual debtors, assuming there is no failure to disclose information or mislead the court, nearly all debtors can expect to receive a discharge of some or all of their debts. Chapter 7 is appropriate for dealing with consumer debt.

Audus Zinkman is an expert on San Antonio Bankruptcy. He has worked in the legal field for over ten years. His main focus is on San Antonio Chapter 13, Chapter 7, Chapter 12, Chapter 11, foreclosure defense, and credit card defense.