Bankruptcy can be a difficult event for families and individuals to go through for various reasons. The idea that you have to ask for forgiveness for not being able to make ends meet on your own is stressful enough not to mention losing property or other assets, family's problems that may arise and of course choosing which type of bankruptcy can be difficult as well. The good thing about bankruptcy is once you file and all of your legal matters are done you are granted a new start from the government. If you are going through a hard time financially and are considering filing, check out this information about Chapter 7 bankruptcy below.
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How Chapter 7 Works:
Chapter 7 is the most common type filed by individuals. Chapter 7 is a straight forward liquidation of equity where the nonexempt assets are given to a trustee and then given to the creditors. The trustee is chosen by the court and most judgment is left up to this person. There job is to turn all assets into cash to pay off the creditors owed.
Chapter 7 Exemptions:
Federal exemption laws are the same nationwide for those who file for all types of bankruptcy. When it comes to State exemptions, this is where they differentiate from each other. The exemptions of course depend on the amount of equity the individual has on each asset or property. Exemptions for bankruptcy are based on a certain dollar amount of equity for certain types of property. If an individual has more equity than is allowed the bankruptcy trustee will probably seek to have the court disperse that equity to creditors.
Who Should File:
When facing bankruptcy, the difficult decision is figuring out what type to file. You should sit down with a bankruptcy attorney and ask for their professional opinion as well as why they think that. Once you explain your situation, they will have a good idea what bankruptcy will be best for your situation. Those individuals whose income is below their state's median family income are eligible for Ch 7. If your income at time of filing is over this mark you can request your income to be looked at over the past six months as well as your expenses to determine if you will qualify or not.
Disclaimer: The information contained in this distribution is intended for informational purposes only. It is not intended as professional advice and should not be construed as such. Do not take legal action based on this content! Always contact a lawyer near you.
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