Chapter 7 is a bankruptcy petition that is also called liquidation bankruptcy. Under Chapter 7, some of your assets would be liquidated to pay off some of your unsecured debts. It is the most common form of bankruptcy in the United States. Under this chapter, most consumer and business debts can be eliminated. The filing for bankruptcy under Chapter 7 would ensure that you can start afresh, without losing your home and other major assets (secured debts). The major advantage of a chapter 7 case is the brevity. You can expect such a case to be over within a period of 3-6 months. The debtor emerges from the proceedings debt-free barring existing commitments like mortgage and car payments. Under the law, there are some debts that can still be due from you after the proceedings. Such loans include student loans, taxes and arrears in child support. If your bankruptcy lawyer is able to suitably adjust your exemptions you can expect to retain major assets like your home and other assets.
Properties that are exempt are determined by the state laws. Your bankruptcy lawyer would be able to instruct you on exemptions to ensure that you get to keep most of your personal belongings. It is not advisable to withhold any properties from scrutiny during bankruptcy proceedings as this would necessitate serious consequences at a later date. You must be honest about revealing all your assets to your lawyer during the bankruptcy proceedings. Under most states the following items can be considered exempt:
* Partial equity (depending on state) of your car
* Partial equity of the primary residence
* Portion of unpaid wages that have been earned
* Public benefits like welfare, social security etc.
* Tools of the trade or professional equipment
* Reasonably basic clothing (no minks etc.)
* Reasonably necessary domestic furniture and goods
* Personal jewelry of limited value
* Personal effects
* Depending on the state, life insurance in terms of cash, loan value or proceeds
Chapter 7 should only be sought if you have not fallen back on your mortgage payments and car notes. If you are behind, your creditors can demand the automatic stay be lifted and these properties and assets can then be foreclosed or repossessed. Under Chapter 7, the following non exempt property could possibly be taken to pay off your debts:
* Unless they are tools of your trade, costly musical instruments
* Collections of any value – stamp/coin collection
* Family heirlooms
* Stock, bonds, cash, bank accounts, other investments
* Second vehicle
* Second residence or vacation home
While filing your petition, discuss all your assets and liabilities in detail with your lawyer to avail all the benefits of Chapter 7. Ephrata, PA residents can take the guidance of qualified legal professionals for bankruptcy advice.
Chapter 7 Ephrata, PA – When you are looking for debt relief under Chapter 7, Ephrata, PA based Mitchell A. Sommers offers sound advice and aggressive representation to protect you, your home and your family.