What Is Chapter 7 Bankruptcy?
Under the several titles of the United States Code, falls the Chapter 7 Bankruptcy code in Title 1. Chapter 7 basically talks about liquidation in detail. To be more specific, it talks about controlling the procedure of asset liquidation.
In this law, all the unsecured debt is divided into different sections and categories. The priority for every section is payment. All the other debt like secured debt is kept back to decrease the risk linked to lending.
How To Know Whether You Can Afford A Chapter 7 Bankruptcy Attorney?
Hiring a Bankruptcy Attorney can be expensive to some extent in many cases. But a lawyer is a professional who helps with:
- Filing procedure of bankruptcy.
- Knowing the type to file for.
- Knowing the working principle of the law.
- Knowing the forms.
- Knowing what type of debts can be decreased or avoided.
- Knowing whether you’ll be able to have access towards any kind of property after the finishing of the case.
A lot of people in our society are unaware of legal laws and regulations. This makes it difficult for people to understand the codes in detail. An attorney is always found a beneficial option but in case you cannot seem to find yourself to afford a lawyer, here is what you can do:
- Stopping payments on debts linked to wiping out during times of bankruptcy.
- Consider taking a loan from friends or family.
- Filing on your own.
- Acquiring help from a free clinic or a legal organization.
- Consider filing for Chapter 13 Bankruptcy and choose to pay only the lawyer fees for your repayment plan.
Is There Any Alternative Option For Chapter 7 Bankruptcy?
Yes, there are many alternatives available in today’s times. There are many business owners to choose to avoid liquidation in business matters. These can be individuals or corporations and sometimes, even partners. These debtors can consider Chapter 11 Bankruptcy Code filing. They can go ahead to file a petition for this purpose.
Another thing that debtors can do is go for the Chapter 13 Bankruptcy Code. They can simply adjust their debts according to this law and avoid Chapter 7 Code.
What Is The Qualification Or Eligibility For The Chapter 7 Code?
When it comes to eligibility, the debtor has to have either of the following positions-
- An individual
- A partnership
- A business firm
- A corporation
There is also a rule of 180 days’ timeframe that the individual must go through before filing for the Chapter 7 Code.
How To Complete The Official Bankruptcy Forms?
To complete the bankruptcy forms officially, provide all of the below-stated information:
- A list containing the number of creditors involved and the number of their claims.
- The nature of their claims has also to be added.
- Debtor’s income source and frequency.
- Debtor’s income amount.
- A list containing the debtor’s property details.
- A list containing the monthly expenditure of the debtor. This must include food expenses, clothing expenses, shelter and other similar expenses.
What Is The Main Difference Between Chapter 7 And Chapter 11 Code?
- The Chapter 7 Code is also called “liquidation” bankruptcy while the Chapter 11 Code is called “reorganization” bankruptcy.
- In Chapter 7, a trustee sells the assets to pay all the debts while in chapter 11, the trustee restructures the debts to continue the business further.
- In chapter 7, all the remaining debts after the selling of assets are forgiven. In chapter 11, the remaining debts have to be paid no matter what.
- Chapter 7 can be used by both business firms and owners in general. Chapter 11 is used mainly by business firms.
Can You Avoid Bankruptcy?
Although bankruptcy is not avoidable in most cases, there can be exceptions always. A key factor to prevent bankruptcy is borrowing it judiciously. It is advised to consult before moving ahead for avoiding bankruptcy.
Conclusion
The above article elaborates upon the Chapter 7 Bankruptcy details including its meaning, differences and other information. It also elaborates a little upon Chapter 11 and Chapter 13 Codes. The answer to whether anyone can afford a bankruptcy attorney or not is stated. Lastly, a few procedures along with the steps to avoid Bankruptcy has been discussed
