What is chapter 7 bankruptcy?

Chapter 7 bankruptcy is also known as a straight or liquidation bankruptcy. It’s the most common form of personal bankruptcy, accounting for nearly two-thirds of petitions today. When a person files for a chapter 7 bankruptcy, they are seeking a fresh financial start, free of the past debts that have encumbered them in the past. Often, these debts are due to situations outside of their control, including medical debt, unemployment, or other factors.

This type of bankruptcy can be used by those who live in or own property or a business in the United States. They must not have been granted a discharge of their debts under a Chapter 7 filing within the last six years or have had their bankruptcy filing dismissed for cause within the past 180 days. In order to file for Chapter 7, it is also necessary to complete a debt counseling class and pass the IRS means test.

Filing bankruptcy forms can be an intricate and difficult process. The forms can be lengthy and require an extensive amount of information, and each has a specific due date. Any errors can result in the dismissal of your case. For this reason, the assistance of our Los Angeles bankruptcy attorney can be an invaluable asset if you are considering filing for bankruptcy.

After you’ve filed for bankruptcy, a trustee will be appointed. This trustee will collect any non-exempt property, and the proceeds from the sales of your assets will be distributed to the appropriate creditors. Although the idea of losing your assets can be worrisome, our attorney can help you understand the difference between exempt and non-exempt property so that you can determine how to save as much of your property as possible through bankruptcy exemptions.

Once your assets have been liquidated, you will receive a discharge on any dischargeable debts. Not all debts are dischargeable. You will still need to pay any child or spousal support for which you are responsible as well as back taxes that are less than three years old. You may also still be responsible for your mortgage and car payments.

If you are facing bankruptcy, contact our bankruptcy lawyer in California to find out more about your options.

Source: Los Angeles Bankruptcy Attorney

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