What is bankruptcy? When
an individual or business is unable to pay their debts, they may find relief
from the debts owed to creditors by filing for bankruptcy. Doing this allows
for a potential fresh start if the claim is accepted. A judge will review your
bankruptcy case and then decide whether to accept or deny your request.
Bankruptcy
can come in many forms. The most common you may have heard of would be: Chapter
7, Chapter 11, and Chapter 13. The type you file depends on your situation,
income, and status as an individual or corporation. The Law Office of Marcie
Baker focuses solely on Chapter 7 Bankruptcy which I will explain in detail
below.
So
what is Chapter 7 Bankruptcy?
Chapter 7 Bankruptcy is
the most common type of bankruptcy that is filed in the United States. Not only
is it the most common type, but it is also the shortest termed form of
bankruptcy that you can file. When Chapter 7 Bankruptcy is filed, the court
will appoint a trustee who will oversee your case. One of the jobs of the
trustee is to take over your assets and use the money from their sale to pay
back your creditors.
One
thing to be aware of is that while a trustee will take over your assets, they
cannot take ALL of your assets. The assets they cannot take over are known as
exempt property and allow you to keep things that you need to live as well as
have a foundation to begin a fresh start. Some examples of exemptions are:
property used for work, a residence, and certain retirement accounts.
In
addition to knowing about exemptions, it is also important to note that while
Chapter 7 Bankruptcy discharges many debts, there are types of unsecured debts
that are NOT discharged. Filing for Chapter 7 bankruptcy does not absolve you
of all financial obligations. For example, some debts that are not discharged
are: Child Support, alimony, student loans, HOA fees, and court fees are some
that you will still have to pay on despite filing for Chapter 7 Bankruptcy.
Here
are some important tips to consider when you are thinking about filing a
Chapter 7 Bankruptcy claim.
Be
organized. Make sure to collect and have copies of receipts, bank statements,
and any other financial documents prior to ever meeting with your attorney.
Be cooperative. You want
to provide information promptly, be timely, attend any and all meetings, and be
sure to email and call back to make sure that everything is going smoothly and
no additional information is needed from you.
Although bankruptcy law
does not require you to hire an attorney to file Chapter 7 bankruptcy, we
highly recommend that you obtain an attorney to help you with your proceedings.
Since you may not have a full understanding of the law, confusion or incomplete
documents could lead to complications in your claim. It is always in your best
interest to consult with an attorney regarding these matters.
As always, the Law Office of Marcie Baker would be happy to speak with you and set up a free consultation to address your needs or concerns. We will do our best to provide the information and help that you require.
***The information in this blog post is for informational purposes only and does not constitute legal advice. If you have questions regarding Chapter 7 bankruptcy please fill out our contact form.***
Sources:
https://www.floridalegaladvice.com/blog/chapter-7-bankruptcy
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