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Chapter 7 Bankruptcy Article
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Understanding Bankruptcy Law
from:Like any legislation, bankruptcy law is complex which is why you should begin the process by consulting with an attorney. In a nutshell, the purpose of the law is to help individuals and businesses resolve their inability to pay their debts. Simply stated the bankruptcy court looks at all of your assets and liabilities, allows certain exemptions and then divides the net assets among the creditors. Of course, it’s never that simple because everyone’s situation is different and complications can occur at any stage.
The purpose of the bankruptcy law is to give honest people a way to get out of debt and start over again. The law does not help those who think they can simply avoid a debt they want to eliminate for whatever reason. This is an important distinction to understand. Filing bankruptcy is a serious decision with long reaching consequences on your credit, but for millions of people it is also a law that offers hope for a fresh start financially.
The bankruptcy law was revised in October 2005 largely in response to claims by creditors that it was too easy for people to claim bankruptcy just to avoid paying their bills. But if you are in serious financial trouble and cannot honestly pay your debts then the new bankruptcy law’s more stringent filing requirements will not delay your bankruptcy.
The bankruptcy law has many different sections that address both individual and business bankruptcies. The law’s intent is to distribute certain assets after statutory exemptions are excluded and then use the proceeds to pay off as much creditor debt as possible. The court determines which creditor gets what amount. All bankruptcies must go through federal district court, though each state has laws concerning the payments to creditors. This is just another example of why you need a bankruptcy attorney.
The bankruptcy law established “chapters” which merely indicates the kind of bankruptcy being filed. Chapter 7 is the one used most frequently by individuals. A court appointed trustee oversees the identification and selling of non-exempt assets and the use of the proceeds to pay debts. In reality, because assets such as a house and car may be exempted, there is often no asset liquidation required. Chapter 11 is used by large corporations that are reorganizing and need to restructure debt in order to survive. There is also a chapter 12 used by farmers and chapter 13 used by individuals asking for a court established and monitored repayment plan.
For individuals filing chapter 7 there are many different aspects to the law which can impact the final result. The law will not allow you to cancel some debts such as child support. The really good news is that you will not lose your home if your debt meets the rules for determining exempt equity. The same is true for your car. You are also allowed to retain cash accounts as long as the sum total does not exceed $10,000. The courts have recently ruled that retirement accounts like IRA’s are also exempt.
It’s easy to see that the new bankruptcy law has many complex provisions, but the goal of these statutes is to give you an honest chance to start over without a heavy debt burden. Your bankruptcy attorney will assist you throughout the entire process.
Chapter 7 Bankruptcy News
Twin Cities Restaurateur Vlahos Files for Ch. 7 Bankruptcy - Twin Cities Business Magazine (blog)
 Minneapolis Star Tribune | Twin Cities Restaurateur Vlahos Files for Ch. 7 Bankruptcy Twin Cities Business Magazine (blog) Dean Vlahos—the founder of the Champps sports-bar chain and the higher-end Redstone American Grill chain—has filed for Chapter 7 bankruptcy protection. In his voluntary bankruptcy petition, which was filed earlier this month, Vlahos listed $45812 in ... Fooled by pal Petters, restaurateur now bankrupt Champps founder Dean Vlahos files Ch. 7 after Petters scheme |
The Rising Cost of Going Bankrupt - JD Supra (press release)
The Rising Cost of Going Bankrupt JD Supra (press release) Between 200000 and one million American consumers are estimated to be unable to afford the cost of filing for Chapter 7 bankruptcy, according to new research released by the National Bureau of Economic Research. The research also reported the average ... |
Local HVAC firm goes bankrupt - RichmondBizSense
 RichmondBizSense | Local HVAC firm goes bankrupt RichmondBizSense A Richmond heating and air conditioning business that closed in late 2011 has filed for Chapter 7 liquidation. Hix Heating & Air Conditioning on Monday filed for Chapter 7 bankruptcy, listing estimated assets of $18000 and liabilities of $1.25 million. |
Wife of NASCAR's Jeremy Mayfield files for bankruptcy - Charlotte Observer
 SunHerald.com | Wife of NASCAR's Jeremy Mayfield files for bankruptcy Charlotte Observer By Sarah Newell Williamson WILKESBORO The wife of former NASCAR driver Jeremy Mayfield recently filed for Chapter 7 bankruptcy, allowing her and her husband to remain in their Catawba home. Shana Mayfield filed for bankruptcy protection by herself in ... Jeremy Mayfield's wife files for bankruptcy |
Young Buck Evicted from Mansion in Bankruptcy Sale - Reuters
Young Buck Evicted from Mansion in Bankruptcy Sale Reuters Young Buck originally filed for Chapter 11 bankruptcy protection, in which a debtor's collections are put on hold. But Buck changed his bankruptcy to a Chapter 7 filing, meaning all of his assets are being sold and divvied up to pay off his debts. |
Gamecocks Honored On Steele's Preseason List - WIS
Gamecocks Honored On Steele's Preseason List WIS The moves comes after their home was put up for auction in April, followingMore >> The wife of former NASCAR driver Jeremy Mayfield has filed for Chapter 7 bankruptcy protection. The moves comes after their home was put up for auction in April, ... |
“Octomom” Nadya Suleman Officially Files Chapter 7 Bankruptcy - Albany Times Union
 Us Magazine | “Octomom” Nadya Suleman Officially Files Chapter 7 Bankruptcy Albany Times Union RoadFish.com men's lifestyle and finance magazine comments on the Chapter 7 Bankruptcy filing by octuplet-mother, Nadya Suleman. RoadFish.com men's lifestyle and finance magazine today remarked on “Octomom” Nadya Suleman's filing for Chapter 7 ... Octomom Nadya Suleman Files for Chapter 7 Bankruptcy Was it Smart for 'Octomom' to Declare Bankruptcy? Nadya Suleman to do porn video, files for Chapter 7 bankruptcy: Favorite people |
Four Tigers Named to All-ACC Baseball Team - WIS
Four Tigers Named to All-ACC Baseball Team WIS The moves comes after their home was put up for auction in April, followingMore >> The wife of former NASCAR driver Jeremy Mayfield has filed for Chapter 7 bankruptcy protection. The moves comes after their home was put up for auction in April, ... |