Chapter 7 Bankruptcy  Chapter 11, Chapter 13

In a bankruptcy petition filed under Chapter 7, a debtor is seeking to obtain a discharge of outstanding debt. The discharge is a court order which absolves the debtor from having to pay debt classified by the bankruptcy law as "dischargeable." The discharge serves as a permanent injunction against otherwise potential collection action for debt incurred prior to the bankruptcy.
In essence, a Chapter 7, bankruptcy discharge allows a debtor to proceed forward without financial turmoil, thereby providing the debtor with an opportunity for a fresh start.

Most debts are dischargeable, such as credit card balances, bank loans, court judgments and medical bills. Debt categorized by the bankruptcy law as "non-dischargeable" includes certain types of tax debt, most student loans, government fines, restitution for outstanding child and spousal support, and debts incurred from criminal or fraudulent conduct.

A Chapter 7 bankruptcy filing technically results in the liquidation of a debtor's assets designated as "nonexempt" by the bankruptcy law. Upon the filing of a Chapter 7 petition, a United States Bankruptcy Court Trustee is assigned to evaluate and sell a debtor's nonexempt assets. The proceeds of any such sale are used to pay off creditors. A Chapter 7 bankruptcy debtor is able to retain all property categorized as "exempt." Examples of property classified as exempt by the bankruptcy law includes:

      • Cash, U.S. Savings bonds and tax refunds up to $2,500;
      • Household furniture
      • All wearing apparel
      • Certain appliances and household goods
      Equity in a motor vehicle up to $2,400. ($4,800.00 For  spouses filing jointly)
      • Equity in a house, condo, or co-op up to $50,000.00
        ($100,000.00 For spouses filing jointly)
      • Most pensions and retirement plans

As a result of the recent changes to the bankruptcy laws it is important to utilize the services of an attorney to carefully evaluate an individuals income expenses.  Individuals who earn over certain income thresholds and have income in excess of certain allowed expenses may not qualify for chapter 7 bankruptcy but maybe a strong candidate for chapter 13 bankruptcy.

 

 
       
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  Types of Bankruptcy  
  Chapter 7
Personal Bankruptcy
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Chapter 11
Business Debt Reorganization
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Chapter 13
Personal Debt Reorganization ...more
 
 
 
 

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We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code.
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