Chapter 7
Chapter 7 bankruptcy is a liquidation proceeding in which the debtor's non-exempt assets, if any, are sold by the Chapter 7 trustee and the proceeds distributed to creditors according to the priorities established in the Code.
Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts. Debtors whose debts are primarily consumer debts are subject to a “means test" designed to determine whether the case should be permitted to proceed under Chapter 7.
Eligibility to file Chapter 7 is determined by the means test instituted with the 2005 amendments to the bankruptcy code.
In most consumer cases, all the assets are exempt, and therefore there are no assets to liquidate and there is no dividend to creditors. Chapter 7 is generally the quickest form of bankruptcy and is available to individuals, married couples, corporations and partnerships.
The purpose of filing a Chapter 7 case is to obtain a discharge of your existing debts.
After you file your bankruptcy petition, you will get a hearing in front of a trustee within 4 to 5 weeks. They will review the documents and determine whether you are eligible for Chapter 7 bankruptcy.
You will have to undergo a means test as well, which is a mathematical formula based on income, total debts and other factors. If you pass the means test, you can begin the Chapter 7 bankruptcy process.
Within three to four months, your debt will be completely discharged and you will get a fresh start.
If you are considering Bankrutpcy please contact Raxter Law your Local Bankrutpcy Attorney for a FREE Consultation so we can discuss your options.
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