If you are planning to file Chapter 7 bankruptcy, a lot of things need to be considered. In Chapter 7 bankruptcy, if you have any non-exempt assets with you, these assets will be sold by the trustee. The trustee is usually appointed for carrying out Chapter 7 bankruptcy procedures and pay off debts to your creditors according to the priority arranged in the bankruptcy code. The individual debtors can keep exempt assets with him. One of the most common forms of bankruptcy filed, Chapter 7 bankruptcy can help you get out of debt pretty fast. For similar reasons, debtors prefer Chapter 7, even if they are capable of paying at least some amount to the creditors. Individuals, corporate business entities and married couples can file for Chapter 7 bankruptcy.
Once you file for bankruptcy in the federal court, the proceedings start. You need to name all your assets and debts. You may be required to give an account of all your financial transactions too. Make a list of all your assets and debts you need to repay to your creditors. It is better to disclose details of your property and its market value as defined in the bankruptcy code.
Appoint an Attorney
Once you file Chapter 7 bankruptcy, automatic stay comes into effect. Your creditors are not allowed to make collection calls to collect debts. The trustee that has been appointed informs all the creditors that you have filed for bankruptcy. Meanwhile, you appoint a bankruptcy attorney who will be taking care of the entire proceedings. Previously, you could take decisions related to bankruptcy on your own. The new Federal Bankruptcy Laws have made it compulsory to appoint an attorney who can guide you better in completing the bankruptcy process. An attorney can suggest methods that will hasten the process and make it less complicated and hassle free.
New Regulations regarding Chapter 7 bankruptcy
As per the new rules pertaining to Chapter 7 bankruptcy, the eligibility criteria for debtors has become more rigid. The Fed has introduced certain changes. Check it out.
According to the new law implemented by Congress, any one who wants to file for Chapter 7 bankruptcy has to undergo the means test. What happens is your gross income will be compared with the median income of the state in which you reside. If your income is found to be less than the median income of the state, you qualify for Chapter 7 bankruptcy.
Debt Counseling Services
The new Federal Laws have made debt counseling mandatory. You have to take a debt counseling session so that the debt counselor can decide if you need to file for bankruptcy or not. After assessing your financial status, if the counselor thinks you need to file, you go ahead or you drop the idea of filing for bankruptcy and follow the alternative option suggested by the debt counselor.