Chapter 7 bankruptcy is a bankruptcy proceeding in which a company stops functioning and goes out of business.This chapter under bankruptcy code is for “liquidation”, for individuals and businessmen.This chapter is for no or low-income debtors, with little to no assets.It frees people from unsecured debts such as medical bills, credit cards, department store bills, payday bills, etc. In many cases, creditors don’t receive anything because debtors don’t have property which can be taken and sold off. The trustee cancels most of the debts, and liquidates the debtor’s property to pay off debts. Employment isn’t a necessity. Job loss could be one of the factors based on which people file for bankruptcy. The whole process takes four to six months.It is important to note that Chapter 7 bankruptcy can’t be filed if the debtor has already received bankruptcy discharge in the past six to eight years.
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There are several criteria which have to be met to be able to file a chapter 7 bankruptcy. Your Houston Bankruptcy Attorney will help you understand more about these. It includes income, family size,
* Income: It can’t be over a certain amount. If it is, you have to pass a “means test”.
* You shouldn’t have filed a bankruptcy case within a certain period of time.
* The current monthly income is measured against the median income of a family the same size of the debtor and compared.The income should be less than or equal to the median.
The court can dismiss the case if it thinks you are cheating your debtors, or if the debtor has enough income to fund a chapter 13 plan.
2) If the eligibility criteria is met, it is time to look for a good bankruptcy lawyer who could tell if chapter 7 is the best, looking at the all the factors.
3) Filling credit counseling is mandatory. This may cost from $30 to $50. The case will be dismissed if it is filed before credit counseling. The bankruptcy lawyer could guide the debtor through the entire process.
4) Along with the petition, the debtor could also file a schedule of assessment and liabilities.
5) Completing the required paperwork
6) File a petition with the bankruptcy court serving the area of debtor’s residence. The filing fee must be paid in full initially.
7) The bankruptcy trustee is someone appointed to administer the bankruptcy estate. The trustee has to be given with a copy of pay advances, and recent tax return.
8) Personal finance management instruction course should be completed, and should be within 45 days creditors meeting