People would always want to get a fresh and new start, especially in terms of financial situations. With the world going through recession, it is always likely for people to experience the impact of this global crisis. And when it comes to dealing with bankruptcy and other related concerns, one of the best things that could be resorted to is the chapter 7 bankruptcy.
Chapter 7, also known as liquidation bankruptcy, is a quick alternative for eliminating unsecured debt. This is offered for businesses and individuals helping them to get back on their feet after having an overwhelming amount of debts.
Preparation for Filing
In order to file for Chapter 7, one must gather altogether his or her financial records to serve as a document for petition. This includes statement of financial affairs, bank statements, credit card, loan documents, paystubs and all other financial records one could account for. These files are very critical and the debtor must also make sure that all of these documents match with his or her financial records as this could make the process a lot easier.
Who are to Apply?
Chapter 7 typically works for people who have a lot of credit card and medical debts. Those who receive collection calls and notices should also consider filing for this. Moreover, for those who do not own much property or do not have sufficient income to pay for his or her bills should likely resort to liquidation bankruptcy as this could help them eliminate their records and start afresh until such time they could get on their feet again.
People who possess below-stellar credit should also consider this alternative as Chapter 7 could help in improving their score during the time that they are under it.
The Process
Chapter 7 starts with a trustee appointed by the court under the chapter 7 case. The main duty of this personnel is to make sure that debtors' creditors are paid as much as possible within the amount owed to them. In this case, the more assets the trustee is able to acquire for the creditors, the more this trustee gets paid.
A short hearing will be conducted where the debtor must attend to. However, creditors, in this event, don't usually show up. The debtors should respond to questions thrown by the trustee primarily concerning about the assets and obligations he or she has.
Until such time that the trustee is able to exhaust all the funds of the debtor obtained by liquidating his or her non-exempt property, most of the remaining debts that are left unsecured would then be discharged.
Most cases under chapter 7 bankruptcy would take six months for completion. And after all the requirements and hearings are sufficed and satisfied, there should be no reason for a person to not have a fresh start with his or her financial dealings.
For the debtors, keep in mind that Chapter 7 is a fair and practical means to deal with your financial problems. However, this should be taken responsibly and make sure that everything would go differently with your financial-related matters as before.
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