USA LAW- BANKRUPTCY UNDER CHAPTER 7

 

Chapter 7 Bankruptcy- in Chapter 7 Bankruptcy one does not have to file a claim of repayment of the debt to creditors. In this type of Bankruptcy, the Court will appoint a trustee to sell of the Bankrupt entities assets to pay off his or her creditors. Bankruptcy Court will allow the entity to keep certain except property but the trustee will liquidate the other assets the entity has.

An Individual, an entity, a Corporation, a Limited Liability Company, a Partnership, or any other entity is entitled to file Chapter 7 Bankruptcy. The section for this bankruptcy is 11 U.S.C. §§ 101(41), 109(b). In this type of Bankruptcy, relief is available to the entity irrespective of the debt the entity owes. 

This type of Bankruptcy gives the entity an honest fresh start in life. The entity has no liability for its debts after the judgment. The bankruptcy discharge will not extinguish a lein on the property. The entity cannot receive within 180 days of filing for this type of Bankruptcy credit counseling. 

Once the petition is filed under Chapter 7 Bankruptcy will stop most collection actions against the entity who files for the Bankruptcy. This stay arises out of the action of the court and requires no judicial filing. The entity will meet with the creditors and under oath answer their questions on the entity's financial situation. Within 10 days of the meeting, a US trustee will report to the court and will decide if the case fits the means test or is simply an abuse of the court.

The Chapter 7 Discharge will relieve the entity of any debts and prevents the creditor from taking any collection actions against the debtor. The entity should consult with a good legal council for the implications of such Bankruptcy proceedings. The Bankruptcy Court issues a discharge order fairly early in the case.