Chapter 7 Bankruptcy Questions

When an individual or an organization is unable to pay its creditors and makes legal declaration of the same, it is known as bankruptcy. Bankruptcy is normally filed by the debtor. However, in some cases, the creditors can also file a petition against a business establishment or a corporate debtor. When a bankruptcy petition is filed by the creditors, it is known as involuntary bankruptcy. Although it is important to note, that a creditor cannot file a bankruptcy petition against an individual debtor, if the debtor is not a part of any kind of business. From this it is clear, that there are different types of bankruptcy.

After the economic recession, different bankruptcy laws came into use. Among the commonly used chapters of the bankruptcy laws are Chapter 11, Chapter 7, Chapter 13 bankruptcy, etc. This is when people ask different bankruptcy questions. In this write up, we will read about Chapter 7 bankruptcy and the most commonly asked questions about this Chapter.

What is Chapter 7 Bankruptcy?

It is also known as 'straight bankruptcy'. It is a measure for helping people in debt, who find it difficult to take care of even their day-to-day expenses, let alone pay the creditors. When a debtor files for Chapter 7 bankruptcy, a bankruptcy trustee is appointed to take care of the issue. There are bankruptcy Chapter 7 exemptions, which are taken into account. The trustee is in-charge of the debtors 'non exempt property'. It is the trustee, who will divide the property among the different creditors. On an average, majority of the debtors are allowed to keep whatever little they have and make a fresh start. After filing for bankruptcy under Chapter 7, the creditors are not allowed to take any action against the debtor in the said debt.

Chapter 7 Bankruptcy Questions and Answers

Having understood this Chapter of bankruptcy, we will turn towards the questions associated with Chapter 7. Taking bankruptcy advice proves to be beneficial in most of the cases.

• What are Chapter 7 exemptions?
Different exemptions have been made under Chapter 7 exemptions. Find about them in this article titled 'Chapter 7 Bankruptcy Exemptions'.

• What is the basic Chapter 7 bankruptcy qualifications?
Before filing for bankruptcy the debtor should have attended bankruptcy counseling. This counseling should take place 6 months prior to the filing. The next criteria is that the debtor should qualify the Means test. The debtor has received Chapter 7 bankruptcy discharge within the last 8 years or Chapter 13 bankruptcy discharge in the last 6 years. Last, but not the least is the debtor's bankruptcy petition has not been dismissed within the last 6 months.

• What is the difference between Chapter 7, Chapter 13 and Chapter 11 of bankruptcy?
Different chapters of the bankruptcy law cover different areas of bankruptcy. Similar is the case with Chapter 7, Chapter 13 and Chapter 11 of bankruptcy. Read on the differences in bankruptcy Chapter 7, 11, 13.

• Should I take bankruptcy assistance before I file for bankruptcy?
This is a very common question asked by people. Depending on the exact kind of bankruptcy, you will have to decide about seeking bankruptcy assistance.

• What is the time period required to file a Chapter 7 bankruptcy case?
There is no specific time period of filing a case under this Chapter of bankruptcy. However, it cannot be filed by individuals whose bankruptcy case was dismissed within the prior 180 days under specified circumstances.

• Chapter 7 bankruptcy mentions 'non-exempt' property. What does it mean exactly?
'Non-exempt' property is one that is taxable. Majority of the personal property of the debtor is sold under Chapter 7 assets. It includes assets like the debtors electronics goods, clothes, etc. The list of assets will have to be made by the debtor. It is the trustee who will review the assets and the liabilities. After revision decision about dividing the creditors property according to the applicable state law will be taken. Normally little assets are left for the debtor, so that he can start afresh.

• What happens to the debt, after I have filed for bankruptcy?
A trustee is appointed for the case, after a debtor files for bankruptcy. The trustee reviews the list of the debtors assets and liabilities. From the assets of the debtor, the trustee divides the assets among the creditors and settles the debt.

• What does Chapter 7 bankruptcy discharge mean?
To gain insight into bankruptcy discharge, take a look at Chapter 7 bankruptcy discharge.

• After filing for bankruptcy, is all the property taken over and divided between the creditors or do I get any part of my property?
In most cases, the assets of the debtor are divided between the creditors. The remaining of the assets are handed over back to the debtor to make a fresh start. In most cases, the debtor does get some assets for himself.

• Does filing for bankruptcy has any effect on the debtors credit rating?
Every person has credit rating. After filing for bankruptcy under Chapter 7, the details of it stay on the creditors credit rating for 10 years from the date the bankruptcy was filed.

• Is filing for bankruptcy voluntary or involuntary according to bankruptcy rules? Can the creditors force bankruptcy against a debtor?
Filing for Chapter 7 bankruptcy is voluntary. The creditors cannot force bankruptcy on a debtor. Take a look at bankruptcy rules for details.

• If one has to file for bankruptcy, how to file Chapter 7 bankruptcy?
When one has to file for bankruptcy, there are certain measures, which need to be taken. Read how to file Chapter 7 bankruptcy for the details.

• Can you enlighten me on the Chapter 7 bankruptcy rules?
The bankruptcy rules of Chapter 7 are explained in detail in the article titled 'Bankruptcy Rules: Chapter 7. Take a look at it for details.

Other Chapter 7 Bankruptcy Questions

Some of the other question regarding this Chapter of bankruptcy are as follows:

• Are the services of an attorney required, when one has to file for bankruptcy?
• What are the service fees one has to pay the attorney, if I do take assistance from an attorney?
• Which of the debts taken are discharged and which of debts cannot be discharged?
• Are husband and wife allowed to file for bankruptcy jointly?
• Who is allowed to file for bankruptcy?
• What happens to the income or property of one spouse, if the other spouse has filed for bankruptcy?
• While filing for bankruptcy, is the debtor allowed to choose between the different chapters of bankruptcy, under which the bankruptcy case can be filed?
• Who, other than my creditors, will know that I have filed for bankruptcy? Will my employer or landlord know of it?
• After a person has filed for bankruptcy, will he be able to get credit again?

For a person to know the Chapter 7 bankruptcy questions and answers, a person can also take help from Chapter 7 bankruptcy information. It will be of help in finding the right answers for questions pertaining this chapter, which one is faced with.