Understanding What is Chapter 7 Bankruptcy
In defining what is chapter 7 bankruptcy rules is one has to understand it is a provision in Title 11 of the US code or bankruptcy code that governs the process of insolvency under the United States bankruptcy laws. What is chapter 7 bankruptcy laws? It is the most frequently used by individuals and they have to be residing in or own property or a business in the states so as to file for chapter seven bankruptcy. So, once again, what is chapter 7 bankruptcy protection, well it’s also known as liquidation.
As well it is the most common form of bankruptcy filed in the United States. It is so popular because it is a form of bankruptcy that can help you get out of debt fast. It is not instant but opens an easier avenue for dealing with a heavy debt situation.
The Process: What is Chapter 7 Bankruptcy and How it Works
Simply explained, chapter 7 bankruptcy allows the debtor to pay off their debts by selling his/her assets and using the proceeds among the creditors they may have. A court officer known as a trustee is appointed to oversee the process of what is chapter 7 bankruptcy is. In some states, a trustee who oversees what is chapter 7 bankruptcy assets procedure is known as a bankruptcy administrator. The responsibilities of the trustee are to observe the filed cases and supervising the activities of the creditor and debtor.
A case under our research of what is chapter 7 bankruptcy and chapter 13 it begins with the debtor filling out a petition in court. They also have to provide financial records to back up the need of filing the petition. The records submitted include a current balance sheet, financial statement and income statement. They are also supposed to submit a summary of tax payment to the trustee who is overseeing the exactly what is chapter 7 bankruptcy proceedings.
There are fees charged for filing a chapter 7 bankruptcy creditors petition and they are paid to the court clerk once it’s filled. The payment for the petition under chapter 7 bankruptcy code must be paid in not more than four installments and the full amount should be completed by the end of four months. The fees are meant to pay various court charges namely, the filing of the chapter 7 bankruptcy petition and the surcharge for the trustee. In the what is chapter 7 bankruptcy case where the debtor cannot pay the fees even in installments, the court can decide to waive the fees completely.
Once the court charges have been paid, a debtor applying for bankruptcy has to fill out a bankruptcy form that shows the list of creditors, frequency and amount of debtor’s income as well as the net amount of living expenses and assets the debtor possesses. This information is to help the jury in its ruling.
What is Chapter 7 Bankruptcy – Qualifying and Means Test
For one to qualify for relief under terms of what is chapter 7 bankruptcy in California, for example, the debtor has to be an individual, a partnership, a corporation or any other business entity. Apart from the case of individuals, relief under what is chapter 7 bankruptcy float. It’s available irrespective of the amount of the debtor owes or whether the debtor is solvent or insolvent.
There is a test, known as the means test that seeks to provide a finding of abuse if the debtor’s disposable monthly income is greater than the specified floor amount or portion of their debt. If t is found that there is a presumption of abuse, under the means test, it can only be refuted in the case of special circumstances. In that particular case, debtors whose income is below the states median income are not subject to it. However any debtor who undertakes this test with more than $ 182.50 in monthly disposable income would face presumption of abuse under the formula of what is chapter 7 bankruptcy code of the United States.