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Chapter 7 Bankruptcy

What You Need to Know About Getting Legal Representation

What You Need to Know About Getting Legal Representation

As is usually the case, some individuals
may need lawyers for a highly specific
function
due to their training and
experience
. These legal professionals will know more about
their field or a more general branch of the law than clients would anticipate.
Such is the case with those facing bankruptcy court
.         

 

A Chapter 7 bankruptcy attorney is expected to be
proficient in all aspects of bankruptcy law
. As such, he or she might be able to help petitioners avoid the
liquidation of their assets. Of course, a Chapter 7 lawyer is a
professional and would gladly accept remuneration in exchange for his or her
legal know-how. Just the same, a Chapter 7 bankruptcy attorney is, at
least theoretically, a servant of the public interest and may yet stand to gain
something from a paid consultation.

 

Certainly,
there are alternatives to Chapter 7 bankruptcy, and a Chapter 7
lawyer can advise an applicant on his or her best course of action. For
example, analysis of a person’s claim may
reveal that Chapter 11 or Chapter 13 is a
more appropriate route to take.

 

Once proceedings in bankruptcy court begin,
a Chapter 7 lawyer can also be an advocate for their clients,
especially regarding exempt properties that are aggressively pursued by
creditors. Certain assets more or less owned by petitioners, notably benefits like
Social Security and investments, may not be touched by collectors in the event
of wholesale liquidation. In fact, as recently as 2005, the Supreme Court
weighed in on the subject, stating in their majority ruling in Rousey v.
Jacoway that the contents of Individual Retirement Accounts (IRAs) are
off-limits when assets are reclaimed.

         

As proceedings become more adversarial,
a Chapter 7 bankruptcy attorney will be an invaluable defender and
supporter. Over the years, bankruptcy courts in the United States have gotten
much more apt to prosecuting perceived cases of abuse of bankruptcy law. If a
defendant is found to have failed the “means test” regarding their
viability for Chapter 7 bankruptcy, a Chapter 7 lawyer can lead the
way in rebutting this charge, pointing out reasons by which income or expenses
should be recalculated to reflect a more accurate depiction of the individual’s
financial status.

What You Should Know About Chapter 7 Liquidation

What You Should Know About Chapter 7 Liquidation

Applying for Chapter 7 bankruptcy or liquidation should not be a person’s first choice when it comes to settling cases of monies owed. Ideally, he or she should be able to work with creditors and financial institutions prior to bankruptcy court. 


General
In times of economic downturn, some people manage their financial problems better than others, or even manage to thrive under apparently bleak conditions. For those caught behind the 8-ball, so to speak, Chapter 7 bankruptcy, also known as liquidation proceedings, may be the only remaining option.
In Chapter 7 bankruptcy, which is the most common form filed with bankruptcy courts, individuals and businesses sell unprotected assets to help pay at least some of the monies owed to collectors, at risk of dealing a blow to their credit ratings in the process. In applying for Chapter 7 bankruptcy, petitioning parties must assure they are eligible for this option lest they get charged with fraud, work cooperatively with the court-appointed trustee overseeing the claim, and attend meetings whereby liquidated assets will be assigned to interested parties.
Depending on the circumstances of a particular case, any number of parties may submit a formal request for this course of action. Often, it will be the debtor’s creditors themselves that propose a Chapter 7 bankruptcy order, or even the U.S. Secretary of State (also known as compulsory liquidation).
Then again, a move to liquidate assets and put a stay on creditors’ collection actions may come directly from the persons or companies looking to file (also known as voluntary liquidation). In the case of a corporation seeking protection under Chapter 7, even before bankruptcy court proceedings begin, this entity may cease to do business, and at some point in these affairs will dissolve itself in part or in whole.

Purpose and Usage

For individual debtors and business owners, the decision of whether or not to apply for Chapter 7 bankruptcy may be a bittersweet one. In many regards, declaration of bankruptcy and liquidation of assets implies loss. Literally, it could be loss that brings someone to their state of economic desperation. Beyond this, there is the material loss of one’s possessions, or the emotional loss of having to admit defeat of sorts at the hands of one’s debt or even having to dissolve a long-standing corporation. In the end, though, what a person may gain is a fresh start.
Such is the very intent of Chapter 7 liquidation for people: to free one of his or her financial obligations. At least in the interim, filing for bankruptcy in this way will, in most cases, force creditors to stop collections while the case is processed without even having to have an extra hearing to decide such matters. Truly, Chapter 7 filings may spell relief for the debtors who initiate them. Just the same, the purpose of Chapter 7 bankruptcy may be understood in terms of what it is not.

Useful Information
Though the most useful details for an individual or a corporation seeking relief through bankruptcy may arguably be the most relative to their situations, more broadly, some vital information must be sought by all parties. In initiating bankruptcy court proceedings under Chapter 7, a petitioner needs to account for all sources of debt and creditors, as well as income and expenses, contracts and leases, and exempt and non-exempt assets.
Furthermore, he/she/it (in the case of a business) must take the time to prepare copies of these records and double-check to make sure everything contained within is accurate to the best of one’s knowledge. Moreover, members of a married couple should each ready those statements of their particular financial affairs, even if they are filing for Chapter 7 bankruptcy jointly.
In Chapter 7-specific court proceedings, one of the most valuable roles a bankruptcy lawyer may play is of advocate and supporter, particularly if petitioners are found to have made a fraudulent bid for relief. Certainly, with their prowess in bankruptcy law, they will be able to identify protected properties owned by their clients and argue on behalf of them (the debtors) keeping these assets in the event that creditors get aggressive in pursuit of them (what is owed).
Plus, lawyers will be instrumental in appealing decisions made by the bankruptcy courts that find people/businesses committed a form of abuse of the system with their initial request. The innovation of the “means test” has made it that much harder to debtors to seek relief under Chapter 7 for fear of litigation against them.

Forms
Including the formal petition itself, a number of important forms are needed by applicants to declare Chapter 7 bankruptcy. As noted above, printed records of one’s financial affairs are a must, as are  details about income and expenses, all assets, debts, and loans. Aside from the Official Bankruptcy Form that serves as the petition, other things must be taken into account. Again, married couples may need more than one set of documentation, and as always is the case, exempt assets that may be retained throughout Chapter 7 proceedings should be enumerated.
Parties seeking Chapter 7 relief from collectors should also expect fees in processing their claim, namely a case filing fee, an administrative fee and a surcharge for the appointed trustee that total some $300 (and of course, hired attorneys will charge their own rates for services rendered). In need-based situations, though, the judge will let applicants pay these costs in installments or completely waive them. 

Governing Laws
In light of the legal language used and the obvious variations in policies from state to state and court to court (notably regarding protected assets), Chapter 7 bankruptcy law can be decidedly complex. Just the same, with uniform policies in place, the general structure of bankruptcy court proceedings and the standards that govern them are largely unified. Chapter 7 bankruptcy is a mere subset of the Bankruptcy Code contained in Title 11 of the United States Code, a 50-title compilation of existing, permanent Federal legislation.
Some aspects of bankruptcy law applicable to Chapter 7 are more established while others have come by way of amendment in the past decade or so. As per tradition, repeat applications for Chapter 7 assistance are discouraged, especially right after the last case was settled. The law also requires that the debtor remain active and punctual throughout proceedings relating to his or her claim or he faces dismissal of his case.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) served as a major overhaul of Chapter 7 principles, adding the now-standard means test by which bankruptcy abuse is assessed.

How to File
Along with the requisite administrative forms and fees and considerations of particular laws that must be followed in filing for Chapter 7 bankruptcy, a person or company must also follow procedural constraints from beginning to end. Certainly, the forum in which these matters will be heard is of great importance. The clerk of court will usually assign a court and judge based on where the applicant lives or does primary business, and a trustee will be appointed to serve as a bridge between debtor and creditors.
Even before these matters come to pass, though, petitioners should verify that they are eligible for Chapter 7 liquidation of assets at all, checking their income against the median salary of the employed in the United States to see if they make more (often, this will disqualify parties) than the established maximum amount set by the Federal Government.
Though not concerned literally with the actual filing of petitions or documents, readying oneself for the creditors’ meeting is a necessary step in the application process as well. Debtors should be cooperative in all regards and with all parties, especially creditors, and should come with all documents that need to be examined, neatly prepared and organized. On top of this, debtors must be prepared to field questions from both creditors and the trustee, and should be fully aware of potential ramifications of opting for Chapter 7 relief. 


Statistics
Despite the policies enacted by the 2005 BAPCPA for consistency from year to year with regard to Chapter 7 liquidation petitions, the differences between corporate and non-corporate filings and regional differences are perennially similar. There is a highly significant disparity between cases for individuals and cases for businesses, with the former accounting for higher than 95% of proceedings in bankruptcy court.
As for which parts of the country yield the biggest numbers per annum under Chapter 7, the Ninth Circuit (i.e. northwest and southwest America, Alaska/Hawaii, and Guam/Northern Mariana Islands) is the leader, responsible for almost 250,000 filings a year, while the First Circuit (i.e. New England and Puerto Rico) is the smallest contributor, responsible for less than a fifth of that annually.

Chapter 7 Bankruptcy Information: Must Read

Chapter 7 Bankruptcy Information: Must Read

Chapter 7 Bankruptcy Information:
A Chapter 7 bankruptcy filing is a liquidation plan; a debtor who files for a Chapter 7 will sell his or her nonexempt property and distribute the proceeds to underlying creditors. Therefore, a Chapter 7 Bankruptcy case does not entail the filing of the repayment plans common in a Chapter 13 filing. Instead, a bankruptcy trustee will gather and sell the debtor (individual filing for a Chapter 7 bankruptcy) in accordance with the regulations and provisions expressed in Bankruptcy Code. 
A portion of the debtor’s property may be subject to mortgages and liens that pledge the property to various creditors. Furthermore, important Chapter 7 bankruptcy information states that the Bankruptcy Code will enable the debtor to maintain certain “exempt” property; however, a trustee is required to liquidate the debtor’s enduring assets. Accordingly, those who file for Chapter 7 Bankruptcy should acknowledge the fact that the filing of a petition under Chapter 7 may result in the forfeiture or loss of property.
Chapter 7 Bankruptcy Information: Eligibility Requirements
The most fundamental Chapter 7 Bankruptcy information revolves around eligibility requirements. The presence of a debt portfolio is not sufficient to engage in a Chapter 7 filing; an individual or business entity must satisfy the eligibility requirements affirmed in Bankruptcy Code. 
To qualify for relief under a Chapter 7 filing, the debtor may be a corporation, a partnership (and other business entities) or an individual. Chapter 7 bankruptcy information concerning eligibility requirements are subject to the means test described for an individual debtor; relief is offered under Chapter 7 regardless of the debtor’s debt amounts or whether the individual is insolvent or solvent. 
Chapter 7 Bankruptcy information regarding eligibility requirements states that the filing’s primary purpose is to discharge certain debts to award an honest worker or individual a “fresh start.” In a Chapter 7 filing, the debtor has no liability for the discharged debts; however, discharge is only available to individual filers, and not corporations or partnerships. 
Chapter 7 Bankruptcy Information: The Process
A Chapter 7 filing begins with the filing of a petition; an individual or business entity must file the petition with the bankruptcy court that serves the area where the individual lives or where the business is organized or operates out of. 
In addition to the filing of a petition, the debtor must file the following documents with the court:
Chapter 7 Bankruptcy information states that the debtor must file a schedule of liabilities and assets
The debtor must provide a schedule of expenditures and current income
The debtor must provide a statement of financial affairs and a document that elucidates the debtor’s schedule of unexpired leases and executor contracts
Debtors must also deliver the assigned trustee with a copy of the tax year return for the most recent tax year, as well as returns filed during the case.
Individual debtors with an imbalanced amount of consumer debts (i.e. credit card debt makes up the majority of the individual’s debt profile) are required to file additional documentation according to Chapter 7 bankruptcy information.
After the debtor files the above documentation, a court fee of $245 (plus an additional $39 for administrative costs) is required. This fee may be waived if the debtor’s income is below 150% of the poverty level and the debtor is deemed unable to satisfy the court fees. 
In order to satisfy the court’s filing requirements, Chapter 7 Bankruptcy information states that the debtor, along with the petition, schedules and statement of financial affairs, the debtor must provide the following documentation to the court system:
A detailed list of all creditors, amounts owed and the nature of each claim
The amount, source and frequency of the debtor’s income
A list of the debtor’s property
A list of the debtor’s monthly expenses
When this information is supplied, the bankruptcy court will appoint an impartial case trustee to administer the filing and liquidate the debtor’s nonexempt assets. The trustee will liquidate the assets in a manner that maximizes the return to the listed unsecured creditors. 


What is Chapter 7 Bankruptcy?

1. Chapter 7 Bankruptcy is a financial program that individuals or businesses enter into when facing mounting debts or economic hardships.

2. Chapter 7 Bankruptcy is a fundamental aspect of the Title 11 of the United States Bankruptcy Code. The specific program, according to the Bankruptcy laws of the United States, governs the process of liquidation.

3. When an individual or business files for Chapter 7 bankruptcy, they will go through a liquidation process (selling their assets for cash) to help pay off their accrued debts. The process, although undesirable, is an effective way to clear off debts and, in essence, obtain a “fresh start.”

4. Chapter 7 Bankruptcy is a unique and popular form of bankruptcy in which a debtor individual or business who faces insurmountable debts liquidates their assets. The creditors, in line with their financial standing, then collect the proceeds of the liquidation process. Following the liquidation process, the majority of the debts are discharged, offering a fresh start to the individual or entity filing for Chapter 7 Bankruptcy.

Legal Process for Filing for Chapter 7 Bankruptcy

1. To initiate the Chapter 7 process, the individual or entity in question must file a number of documents and papers with their local Bankruptcy Court.

2. In order to receive a valid standing, the individual or entity must demonstrate the inability to file for reorganization or a repayment plan. Chapter 7 Bankruptcy filing does not offer the debtor the ability to pay off their debts through incremental payments, but rather, a liquidation process where the debtor’s assets are held against their debts.

3. As a result of the liquidation process attached to Chapter 7 Bankruptcy, the individual or entity must provide to the court a comprehensive list of all assets suitable for liquidation.

4. Upon receiving the list of assets, the court will review the information and determine if the debtor’s liquidated assets are substantial enough to fulfill their debt obligations.

5. After approval, the filing party must schedule a meeting with their creditors to discuss the assets that will be awarded to them. During this meeting, creditors may agree to take partial payments or may demand the full satisfaction of the debts owed to them.

6. Furthermore, a review of all the debts obtained will be reviewed. If the court finds that the debts were fraudulently obtained or were attached to such items as student loans, the filing party may be relieved of their obligation.

7. A lengthy procedure (typically 4-6 months) is required to initiate and subsequently complete a Chapter 7 filing.

Legal Aid Associated with Chapter 7 Bankruptcies

1. As a result of the program’s importance and the various laws which regulate the filing of a Chapter 7 Bankruptcy, it is strongly suggested that an individual engage the services of a bankruptcy attorney or legal professional to facilitate their claim.

2. Bankruptcy attorneys will deal with the local court systems and streamline the process of liquidation. A bankruptcy attorney (varies on a case by case basis) will also facilitate the delivery process of the liquidated assets to the respective creditors.

Learn About Chapter 7 Bankruptcy

Learn About Chapter 7 Bankruptcy

With individuals and companies struggling to cope with the financial hardships inherent in the nation’s recession, bankruptcy is a very real threat for many Americans. Of course, as always, there are exceptions to the rule.  For example, a select few people are thriving in this economy, though this is highly dependent on their business or line of work and their accumulation of resources prior to the recession’s onset. Others may not be doing better during this period of downturn, but are managing with less. 
For others who have not been so lucky and have found themselves at the short end of job cuts and other financial shortcomings, more drastic measures are required. Many American workers and corporations may be forced to contemplate Chapter 7 bankruptcy, also known as liquidation. What exactly does Chapter 7 bankruptcy entail? The following is general information on liquidation and its types:
Both private individuals and business-oriented organizations (e.g. partnerships, corporations) may file for Chapter 7 bankruptcy, which may partially explain why this form of bankruptcy is the most commonly sought-out type in the United States today. In individual fiscal years, Chapter 7 bankruptcy has been responsible for more business and non-business bankruptcy filings than Chapter 11 bankruptcy, Chapter 12 bankruptcy, and Chapter 13 bankruptcy.
Liquidation of assets refers to when part or a whole of a company is dissolved, or the material possessions of an individual are sold as a means of repaying debts. Following a formal Chapter 7 bankruptcy request, the liquidation of assets is overseen by an appointed trustee.
Liquidation can be requested by a number of different parties, including even the Secretary of State in certain cases. Irrespective of who petitions to move forward with such a process, though, there are two major manners by which it can be conducted. Some applications for Chapter 7 bankruptcy occur at the behest of individuals or companies themselves. In the event of a business, they will usually cease to do business if they have not already. Meanwhile, liquidation of assets may be demanded by the creditors that first issued loans and any other agencies to which people may be indebted, in which case such an operation is considered compulsory liquidation. 

Understanding the Purpose and Usage of Chapter 7

Understanding the Purpose and Usage of Chapter 7

When people or businesses apply for Chapter
7 bankruptcy, unless their claim is an attempt at an abuse of the system,
it is something of a last resort for them. Especially with regard to
liquidation of assets, Chapter 7 bankruptcies involve loss in a very
tangible sense, as those who file for this course of action must live with the
decision to permanently dispose of many of their possessions
,
which will have an impact on them both physically and emotionally
.

         

It should be noted that Chapter 7 bankruptcy
is different from Chapter 13 bankruptcy
per
sé. Chapter 7 bankruptcy generally does not allow for applicants to keep their
property the way Chapter 13 bankruptcy does, unless those assets are
specifically exempt from being reclaimed.

         

Though this may not be a pressing concern of
owners and contributors with a financial stake in a company,
business-oriented Chapter 7 bankruptcies may also be a means of selling
the rights to the organization without getting rid of everyone involved.
Specifically, those employed by a corporation filing for bankruptcy may not
necessarily lose their jobs, as the buyers, following liquidation, may choose
to incorporate both the infrastructure of the old entity and the employees who
helped maintain it. Under such a scenario, the luckiest of these workers would
become new agents of the larger association that absorbed them.     

Make Sure You Understand Chapter 7 Bankruptcy Forms Before Filing

Make Sure You Understand Chapter 7 Bankruptcy Forms Before Filing

As liquidation of a person’s assets or
dissolution of a whole company is a legal process that involves a formal
petition, there are without a doubt Chapter 7 bankruptcy forms to be
filled out in the act of applying. Of course, the request itself that must be
received by the courts in instances of voluntary liquidation/dissolution is one
of these Chapter 7 forms
. In fact, there will be
several Chapter 7 bankruptcy forms that are required to be completed
before the process can begin and applicants can receive relief from the
pressures of debt.

 

In their specificity, these Chapter 7
forms cover a number of different administrative functions in readying all
parties for bankruptcy court. The following is a list of some Chapter 7
bankruptcy forms that will be needed from start to finish:

         

As noted, there is the matter of the petition
in itself. Applicants must file petitions for declaring Chapter 7 bankruptcy
with the bankruptcy court
. Chapter 7 bankruptcy is an option for business
owners and private individuals alike. In the case of the latter, some might
request a liquidation of their assets even when
the primary source of their expenses are consumer-based.
Under these circumstances, additional Chapter 7 bankruptcy forms will
likely have to be provided by those contemplating this course of action.

 

Among the Chapter 7 forms to be asked of
petitioning parties are evidence of any recent payments received from
employers, accounts of loans and other financial arrangements reached with
educational and financial institutions, and a record of credit counseling in
which repayment of debts was discussed.

         

Beyond the aforementioned Chapter 7
bankruptcy forms associated with the overall Official Bankruptcy Form
Petition, there are other special considerations that must
not be overlooked. While this much may largely not apply to younger applicants,
a printed schedule of all exempt properties

is necessary.

Easy Guide to Understanding Chapter 7 Governing Laws

Easy Guide to Understanding Chapter 7 Governing Laws

To list all of the Chapter 7 bankruptcy laws in the United States would be a decidedly difficult task. With all of the exceptions to the rule and the different provisions that exist for individuals versus partnerships and companies, Chapter 7 bankruptcy law is decidedly complex. In light of this, while virtually all Chapter 7 bankruptcy laws have a time and place when they are relevant, some are imaginably more relevant more often than others.
 
As with other forms of codified provisions, American Chapter 7 bankruptcy law is a melange of statutes at the Federal and State level. Moreover, it is a blend of more established Chapter 7 bankruptcy laws and newer amendments to the policies on record. The following are notes on some of the more prominent applications of Chapter 7 bankruptcy law:
On the national level, Chapter 7 bankruptcy laws, as binding pieces of legislation, are determined by the legislative branch of the United States government. Chapter 7 bankruptcy law realistically is only a subset of all bankruptcy law in this country contained in Title 11 of the United States Code, a collection of the permanent statutes affecting the nation. The Code itself contains 50 titles in total and is maintained by joint efforts of the Office of the Federal Register, the National Archives and Records Administration, and the Office of the Law Revision Counsel. 
Chapter 7 bankruptcy laws vary from state to state, especially concerning the standards by which exempt properties may be named. They also vary from court to court by how they may be interpreted. Federal Chapter 7 bankruptcy law, though, specifically addresses who is not eligible to apply for this form of relief according to the Code’s legal language. In particular, repeat applications for debt relief through Chapter 7 bankrupt proceedings are generally discouraged within six months of one another, especially if the petitioning party failed to appear before a bankruptcy court as requested.
Significant changes to Chapter 7 bankruptcy law have been enacted fairly recently, as can be seen in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

How to File Chapter 7 Bankruptcy

How to File Chapter 7 Bankruptcy

In filing for Chapter 7 bankruptcy, the
“where” aspect of the petition is definitely not to be overlooked.
Applicant parties must submit formal requests to the bankruptcy court with jurisdiction
. However, before even concerning oneself with how to file
for Chapter 7 bankruptcy, a person contemplating such measures should see that
they qualify.

 

The means test may be a critical determinant
to see if individual debtors and insolvent corporations may legally petition

for Chapter 7 bankruptcy
. Especially with regard
to the former, if one’s monthly income over the past five years exceeds the
median salary of the working population in the United States and/or regularly
adjusted dollar amounts (currently at a rate slightly over $10,000), they may
be charged with an abusive petition. Imaginably, such an accusation is by no
means a light matter
. Therefore, prior to filing for
Chapter 7 bankruptcy, prospective petitioners are advised to consult with a
credit counselor as well as a bankruptcy attorney.

         

Another logistical point of concern
with how to file for Chapter 7 bankruptcy is how to prepare for the
inevitable creditors’ meeting mediated by the trustee
.