Should You Choose Bankruptcy Chapter 7 For Your Debt Relief?

The global crisis had affected many people and businesses

. People are plagued by demand letters while the businesses are threatened by foreclosure of mortgaged properties. Relief can be afforded to all affected people and firms through the Bankruptcy Law.

The Bankruptcy Law has many chapters that can be helpful to people in financial crisis. Several chapters are open, depending on the situation of the debtor. The common options are Chapter 7, 11 and 13. Anybody who is considering the filing of bankruptcy should be assisted by a lawyer. Thus, if you are planning to get debt relief, you should consult an experienced bankruptcy lawyer. Let us first concentrate on the Chapter 7 and determine if this applies to your case.

Under the bankruptcy law, Chapter 7 can be petitioned by both a person and a firm. Together with the filing of petition, other required declarations are the assets and income of the debtor. The filing of Chapter 7 is usually voluntary on the part of the debtor. The plan on how to deal with the debt has to be included when filing is undertaken. Filing of the petition may involve some expenses as you have to pay for the filing fee as well as fees of the attorney. However, these expenses can be paid in installments which can be for duration of 180 days.

Before you can file the bankruptcy petition, you will be required to undergo debt counseling to be handled by a counseling agency. This step should be undertaken within 180 days from the time you filed your petition.

How does a debtor enjoy immediate relief through chapter 7? The filing of Chapter 7 will put a temporary stop to the collection process instituted by the creditors. Along with the filing of this chapter, the assets of the filer will be assessed and classified as either exempt or non-exempt. All mortgaged properties of the filer will not be part of the liquidation process.

With the filing of this debt relief under Chapter 7 of the Bankruptcy Code, the debtor will relinquish his control of all his non-exempt assets. You can expect that under the petition, some of your debts will be discharged. The best relief however will come from the peace of mind where you are spared from receiving demand and other collection letters. Businesses can apply for this relief but partnerships and corporations are not included, mainly single proprietorship businesses.

Under this same chapter, a bankruptcy trustee is assigned. This trustee will be assigned to handle the disposal of your non-exempt assets. All of these non-exempt assets can be in form of money and property and these assets should have no liens so that they can be disposed or sold.

Chapter 7 can be a great relief to any debtor. However, you may not be able to properly complete your petition if you do not consult a bankruptcy lawyer. Your legal counsel can determine if you qualify for this; if not, he can explore if you would be eligible under chapter 11 or 13.

by: John Smithes

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