Generally, a debtor’s major interests in a Chapter 7 case are to retain exempt property and obtain a discharge that covers as many debts as possible. A discharge releases the debtor from personal liability for discharged debts and prevents creditors from taking any collection action against the debtor or the debtor’s property.
Chapter 7 bankruptcy, also know as “liquidation” bankruptcy, is a federal court process that liquidates your debts. Both individuals and businesses can file for Chapter 7 bankruptcy.
In both cases, a trustee is appointed by the court to liquidate certain assets that belong to the debtor to pay off as many of their debts as possible. Unlike other bankruptcy filings, a Chapter 7 bankruptcy does not require a repayment plan. Filing a Chapter 7 bankruptcy is an opportunity for an individual to get a FRESH START and be discharged of credit card and other kinds of unsecured debt. An automatic stay goes into effect immediately once a debtor files for bankruptcy that prohibits creditors from taking any actions to collect the debts you owe, such as lawsuits, foreclosure, eviction, and interruption of utility services.
For Individuals Filing Chapter 7 “Consumer” Bankruptcy: Since October 2005, a new bankruptcy law has added new requirements to the bankruptcy process (see Bankruptcy Laws).
For Businesses Filing Bankruptcy Under Chapter 7: When a business files for bankruptcy under Chapter 7, the business ceases all operations and shuts itself down. Unlike Chapter 11 Bankruptcy, no reorganization plan is put into place and the business is not allowed to continue doing business. A trustee is appointed to liquidate the business’s assets to pay its debts. Secured creditors are paid off first, followed by unsecured creditors, and stockholders are only paid if the other creditors are paid off completely. The bankruptcy law regarding the scope of a Chapter 7 discharge is complex, and debtors should consult a competent attorney prior to filing.
The attorneys at The Law Office of Donald E. Hood, PLLC will handle all aspects of your Chapter 7 bankruptcy so that you will get the FRESH START you deserve. We are a debt relief agency, and we help people and businesses file for bankruptcy.
The new bankruptcy law establishes stricter criteria for filing Ch. 7 bankruptcy cases. A debt can typically be discharged in a Ch. 7 case if it is unsecured, means there is no property securing the debt.
Filing for bankruptcy is an important decision, and The Law Office of Donald E. Hood, PLLC wants to make sure that the type of bankruptcy protection that you choose is the right one for you.
You are entitled to keep a generous amount of your belongings when filing Ch. 7 bankruptcy. Texas law provides for high personal exemptions–items that are protected from seizure by your creditors.