What is Chapter 7 Bankruptcy?

Posted by Lee StringhamAug 15, 20140 Comments

Chapter 7 bankruptcy is a specific chapter of bankruptcy that allows for quick and easy debt annulment, where a bankruptcy trustee supervises the cancellation of most, if not all debts and then liquidates property as a means of reimbursing creditors. Often called “straight liquidation” or “straight bankruptcy,” Chapter 7 is often the simplest, easiest and most straightforward approach to rising above credit debt and reestablishing a life of normalcy, without the constant fear of property and asset repossession.

While this may sound enticing to those who are facing financial hardship, there are many hoops an individual must jump through in order to establish that they are, in fact, incapable of repaying debts, as well as a number of other qualifiers that stop many in their tracks.

In order to file for this type of bankruptcy, and individual must not have filed for bankruptcy in the past six to eight years depending on the type of bankruptcy filed, and you must complete an eligibility and means assessment. Upon declaration, the bankruptcy courts will place an ‘automatic stay' on your property and assets, which prevents creditors from taking your belongings and harassing you. This weight being lifted off of your shoulders can be a tremendous relief, and will allow you to breathe throughout the rest of the process without worry of waking up to find your vehicle repossessed or an eviction notice from your home.

Upon the filing of paperwork, which should be filled out with the professional assistance of a bankruptcy lawyer, such as John A. Hixson, you are technically signing over what you own, as well as your debts and overdue credits to the bankruptcy courts, who will evaluate and assess the best way in which to repay debts while attempting to cause inconvenience in your life.

Using chapter 7 bankruptcy law, an experienced attorney such as John A. Hixson will assist in outlining your secured assets. These are items that are essential to your life, such as home equity; clothing, furnishings, automobiles and other items, and they cannot be sold to reimburse your creditors due to their importance in your life.

Make no mistake: it is the job of your appointed court trustee to pay back your creditors as much as they possibly can and they will fight the legitimacy of your assets status as ‘secured,' so it is extremely important to hire a lawyer like John A. Hixson to protect your livelihood, so you can settle back into routine and as little hindrance as possible, following your bankruptcy.

A meeting will be arranged, where you, your trustee, your attorney and your creditors will sit down and discuss a plan to pay back your creditors using your unsecured assets, after which your trustee will begin the process of liquidating what he or she can as an effort to pay back your debts. After the trustee has sold off as many of your unsecured debts as they possibly can in order to pay back your creditors, your debt will be lifted and you can once again live a life free of oppressive creditors.

Call John A. Hixson to get the ball rolling today!