Cash is the lifeblood of any human activity. If you do not have the necessary cash, you are considered to be bankrupt in the U.S. Today, many citizens file for bankruptcy. Taking this into consideration, the U.S. government has come up with chapters to deal with bankruptcy. One of the many chapters is Chapter 7 bankruptcy. This is also called straight bankruptcy and is a liquidation proceeding. This way it saves the debtor from loosing all his assets. Moreover, it helps to give a person a fresh start in his financial career.

A certain number of forms need to be completed to proceed with the bankruptcy chapters. Chapter 7 bankruptcy is no different. This form gives a statement of the current monthly income and expenditures and is completely official in nature. This has to be completed by most of the
individuals filing for bankruptcy relief. hapter 7 bankruptcy forms includes a form that serves
as a means of testing purpose of the debtor filing under the said chapter. Some of the questions
and details asked on these forms come from the Census Bureau and the Internal Revenue Service.

As one starts filling out the forms and makes a petition for the Chapter 7 bankruptcy, he needs to
give the following list of details. The form will need a list of all creditors, the amount and the nature of claim involved. It will also have to provide proper details about the source, amount, and the frequency of the debtor?s income. Moreover, one should also include
information pertaining to the debtors? property and monthly living expenses, such as utilities, taxes and expenses on medication and transportation

Writen By : Kent Pinkerton

Tags: Chapter 13 Bankruptcy, Chapter 13 Trustee, Chapter 7, Filing Chapter 13

In a Chapter 7 bankruptcy, an individual is allowed to keep certain exempted property. There are 19 other general classes of exemptions that cannot be discharged in a Chapter 7 proceeding. They can be summarized as child support, taxes, student loans, fines and restitution imposed by a court for any crimes commited by the individual. A recent decision submitted by the Supreme Court in a particular case held that assets in Individual Retirement Accounts (IRA) are protected under 11 U.S.C and 522(D) and are thus exempted from withdrawal.

In the case of a married person in a community property state, the estate may exclude certain
community property interests of the debtor\’s spouse, even if the spouse has not filed for bankruptcy.

The estate may include other items like property acquired by will or inheritance within 180 days of the
commencement of the case. An individual debtor is allowed to choose between a \”Federal List\” of
exemptions and the list of exemptions provided by the law of the state. However, federal law may
state that only the state list may be available in that particular state. In states that allows a choice
of exemptions lists, the debtor may make full use of this to his or her benefit. In some states, exempt
property includes equity in a home or a car, tools of the trade and some amount of personal effects.

The major purpose of bankruptcy is the orderly and reasonable management of debt. Banks and
other deposit institutions, insurance companies and certain other financial institutions and entities
are exempted under the bankruptcy code. Instead there are special state and federal laws that
govern the liquidation and reorganization of these companies.

Writen By : Kent Pinkerton

Tags: Chapter 13 Bankruptcy, Chapter 13 Trustee, Chapter 7, Filing Chapter 13

Chapter 13 bankruptcy is for individuals in the United States who would like to undergo a financial reconstruction supervised by a federal bankruptcy court. This chapter allows income receiving debtors a debtor rehabilitation, provided they fulfill a court-approved plan. Chapter 7 governs the process of liquidation under the bankruptcy laws of the United States. A Chapter 7 filing means that the business intends to sell all its assets, distribute the proceeds to its creditors and cease all operations. If the debtor lacks sufficient disposable income, then it is viable to fund a Chapter 13 plan.

In a Chapter 13 reconstruction, the debtor proposes to pay his creditors over a 3-5 year period. Under Chapter 7
filing, creditors with secured loans are given first preference over the debtor?s assets. Under Chapter 13, the debtor?s creditors cannot attempt to collect on the individual?s previous incurred debt during the rehabilitation period except through the bankruptcy court.

In this case, they end up with less money than they are owed.

In a Chapter 7 case availability of future credit is difficuilt to ascertain and, in some cases, not possible.

However, in a Chapter 13 case, credit can be permitted upon obtaining the Chapter 13 trustee?s
permission. In both the chapters the disadvantage of filing for bankruptcy is that a record of it stays
on the individual?s credit report for 10 years. The advantage of filing under Chapter 13 is the abiity to stop foreclosures and to have accelerated mortgages reinstated upon the completion of the bankruptcy plan. The advantage of filing under

Chapter 7 is that the debtor is allowed certain exemptions like child support, retirement income, etc.

Writen By : Kent Pinkerton

Tags: Chapter 13 Bankruptcy, Chapter 13 Trustee, Chapter 7, Filing Chapter 13

Bankruptcy proceedings are supervised and litigated in the United States bankruptcy courts.

These courts deal with the liquidation process under the bankruptcy laws of the United States. There are two types of bankruptcy,
which are filed in a federal court of law. The first one is where a business files for bankruptcy. This
chapter is made use of when a business, due to various reasons, is in dire financial trouble and is not
able to service its debts and/or repay its creditors on time. The business may file of its own accord or
may be forced by creditors to file for bankruptcy under Chapter 7.

Once a business is registered under Chapter 7 it may mean that the business, to settle its various
debts, must sell its assets in order to distribute the proceeds among its creditors
and close up business. The possibility of its employees losing their jobs is very real. Sometimes
a complete takeover by another company may happen. If the business has issued bonds
of any type, then the bondholders are entitled to first claim over the proceeds from the sale of the
company\’s assets.

The second kind of bankruptcy is where an individual files. In a Chapter 7 bankruptcy, an individual is
allowed to keep certain exempt property. Many types of unsecured debts are cancelled. The
disadvantage of filing for personal bankruptcy is that the record stays on the individual\’s credit report
for a period of ten years. This may make future credit less available to him or her. In some
cases, removal of actual debt from the filer\’s record tends to improve his or her creditworthiness. At any
rate, consumer creditworthiness is a complex issue and dependent upon many factors.

Writen By : Kent Pinkerton

Tags: Chapter 13 Bankruptcy, Chapter 13 Trustee, Chapter 7, Filing Chapter 13

Chapter 7 is the most common type of bankruptcy in the United States. When an individual or an unsuccessful business is deeply in debt and not capable of servicing that debt or can\’t pay back its creditors, it may file or be forced by its creditors to file for bankruptcy in a federal court under Chapter 7. This refers to liquidation. A Chapter 7 filing means that the business intends to sell all its assets, distribute the earnings to its creditors, and then close down operations. One of the major purposes of Bankruptcy Law is to give a person or business, who is completely burdened with debt a fresh start by wiping out debts. Filing for bankruptcy under Chapter 7 has a number of pros and cons. As such, adequate care should be taken before filing.

Claiming for bankruptcy under Chapter 7 has a number of advantages. There is no limit on the amount of debt that a person can erase. After distribution of assets, the balance amount due is duly discharged. Creditors or bankruptcy courts do not have a claim on the wages earned or assets acquired by a person after claiming for Chapter 7 bankruptcy. There is no minimum amount of debt that needs to be acquired. Filing for Chapter 7 enables a person to get out of a debt faster as the procedings are often over in about 3 to 6 months.

Disadvantages or cons of filing Chapter 7 are varied. People may lose their non-exempt property that can be sold by the trustees. Some debts tend to survive and can be claimed after the case has been closed. In the event of foreclosure on the residence of the applicant, lenders efforts are only held up provisionally by filing for Chapter 7. Co-signers of a loan can be trapped with the debt unless they file for a similar safeguard. Chapter 7 bankruptcy can be filed only once every six years. Apart from this, filing for chapter 7 bankruptcy damages a persons credit rating. This makes it difficult for him to obtain credit in the future. It is difficult to withdraw from a Chapter 7 filing, as such a person should only avail of this protection as a last resort.

Writen By : Kent Pinkerton

Tags: Chapter 13 Bankruptcy, Chapter 13 Trustee, Chapter 7, Filing Chapter 13

Chapter 7 of the Bankruptcy Code presides over the process of liquidation under the bankruptcy laws of the United States. (Compared to this, Chapter 11 presides over the process reorganization of a bankruptcy). Chapter 7 is the most common type of bankruptcy in the United States. When an unsuccessful business is deeply in debt and not capable of servicing that debt or payback its creditors, it may file or be forced by its creditors to file for bankruptcy in a federal court under Chapter 7, which refers to liquidation. A Chapter 7 filing means that the business intends to sell all its assets, distribute the earnings to its creditors, and then close down operations. This may or may not mean that all workers will lose their jobs. When a very large company enters Chapter 7 bankruptcy, it may be that complete sectors of the company are sold as a whole to other companies during the liquidation.

Secured creditors, such as debenture holders and bondholders, have a higher-priority claim on the proceeds as compared to other unsecured creditors. These generally refer to vendors who have not yet been paid for products previously delivered to the company. A company or other legal entity that is a debtor under Chapter 7 is not entitled to a discharge of its debts once all assets of the company have been fully dispensed — the case is closed and the debts of the entity, hypothetically, continue to exist.

Individuals need to file for bankruptcy in a federal court under Chapter 7. In a Chapter 7 bankruptcy, the individual is permitted to keep specific exempt property and most liens. The interim trustees sell other assets present. These proceedings are used to repay creditors. Often many types of unsecured debt are paid in part or written off. There are 19 (as of 2005) classes of debt not discharged in a Chapter 7. Common exceptions to discharge are child support, most taxes, student loans and fines imposed by a court for any crimes committed by the debtor.

Claiming Bankruptcy under Chapter 7 has its set of advantages and disadvantages. As such, a business or an individual should take into consideration a number of factors before claiming.

Writen By : Kent Pinkerton

Tags: Chapter 13 Bankruptcy, Chapter 13 Trustee, Chapter 7, Filing Chapter 13