Understanding the law of Chapter 7 Bankruptcy

Chapter 7 bankruptcy is a big step for any homeowner in the state of Florida. Bankruptcy can really destroy your good credit for years to come, even after you file. A Chapter 7 bankruptcy will stay on your report for up to 10 years, making it harder to get loans or other forms of credit. If you choose not Chapter 7, your late payments, defaulted loans, repossessions, judgments, and other debts will still hurt your good credit, and could be harder to explain to a potential lender in the future.

There are a number of steps involved when you file a bankruptcy. First, you need to consult with an attorney who will help you determine which type of bankruptcy is right for your situation and your needs. Once that is determined, you must then prepare all of your financial information and assets so you can be properly filed under the appropriate laws. If you have many assets, then you will want to use those assets in the event of a Chapter 7.

In most cases, the filing of a chapter 7 consists of a petition to the court requesting a temporary protection from creditors. On your petition, you will outline all of your debts and assets, giving the court reasons as to why these items should be exempt from repayment to the creditors. Once the petition has been filed, it can be published in a court notice, given to the local postmaster, the Department of Revenue, and anyone else who may have contact with your debtor. This is important, as you will want to keep the debtors aware that you are asking them to repay a specific amount of debt (the amount exempted from repayment by the court) and will not be requesting any money from them to repay any other debts that they might have.

In the case that the court does not grant you this protection, then you will file a petition for chapter 11 bankruptcy. Chapter 11 bankruptcy allows the filing party (you) to declare that all collection actions and wage garnishment orders against the debtor will be discontinued. You will then be allowed to pay off your creditors over the course of several years while paying the necessary back taxes at the same time. The tax implications should be of particular interest to people with substantial income from various sources.

Many people choose to file in both instances, only going with the bankruptcy filing if the trustee already exists. The trustee will file the appropriate paperwork to the court, after which a hearing will be held in front of a judge to determine whether the individual is able to pay off the debts in a reasonable amount of time. If the judge  decides in favour of the creditors, then you will receive a discharge. This discharge will allow you to resume all of your financial activities but will not extend to your creditors. Chapter 7 bankruptcy automatically discharges a debtor if no discharge has been granted in the previous six months, but this can vary based on the circumstances of your case.

Both types of filings are fairly easy to accomplish, but it always helps to be fully aware of the rights granted to you by the law. A chapter 7 case is considered a personal bankruptcy, which grants you certain protections over your assets, including: exemption from certain taxes, the right to have your wages garnished, asset protection from certain lawsuits. The debtor in filing the petition must be a resident of the state in which the bankruptcy court is located. To learn more about filing a successful chapter 7 case, contact a qualified bankruptcy lawyer. This article is not intended to provide legal advice, and is for information only.

If you want any legal advice related to chapter 7 bankruptcy or any other cases in Florida, you can hire a team of expert lawyers of Galewski Law Group. For free consultation, you can call us at (800)755-4968

Source URL: https://galewskisite.wordpress.com/2021/04/08/understanding-the-law-of-chapter-7-bankruptcy/