When you file for Chapter 7, everything you own, unless otherwise specified by law, belongs to the state. (which is why it is called liquidation) Usually a court appointed official will be the one to do this and called the "trustee".
The job of a trustee is simply to sell all the assets that are now owned by the state and the proceeds go to those you still owe money. After doing this the court will cancel many if not all of your remaining debts so that you can have a clean slate to lie.
If your looking to file for Chapter 7 bankruptcy here are the steps to take.
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1. Way your options.
Once you file bankruptcy it will be very hard to apply for loans and mortgages. Filling for debt will usually damage your credit rating for ten or more years. If you don't absolutely have to go into bankruptcy don't.
2. Find the right lawyer.
You don't need to hire a lawyer but it is highly advised since it may save you money in the long run. Lawyers will often let you talk with them before you give them any money so find the right one for you.
3. Fit the legal parameters.
Petition for bankruptcy at your local corut. (if you are a business and in debt you will have to file bankruptcy with where the business was organized or does most of its business at. A lawyer will be able to assets you with this and the forms you need to fill out.
4. Pay the fees.
All court cases require fees and this one is not exempt. You will need to file the following, case filing fee, administrative fee, trustee fee. When you file you will need to see the courts clerk to pay these fees.
5. Send notice to your creditors.
Once you file for Chapter 7 Bankruptcy, pay the fees, fit the legal parameters, you will be granted what is called an "automatic stay". This means that collections agencies will be put on hold against your possessions and yourself. Creditors will no longer be able to continue lawsuits, wage garnishments, or demand money over the phone.
The court clerk will give notice to all creditors to all creditors you have notified them of. The trustee of you case will have meetings with your creditors over the next twenty to forty days.
6. Working with your trustee.
The trustee is a very important in your bankruptcy case. The primary duty of a trustee is to liquidate any assets so that they can make as much money possible to sell to pay back your creditors. This may even mean selling your property.
Since your trustee has so much power to sell your stuff it is important to cooperate with them. You may be asked to give them financial documents or answer questions the trustee may have.
7. Afterwards (discharge)
If you are able to get Chapter 7, assuming a creditor dosnt file a complaint, means that your are released from all personal liability of debts and will prevent creditors from taking any more collections from you. It is highly likely for you to be discharged if you are an individual.
If you are able to get this far in the legal process you have completed Chapter 7 and are now debt free. From here you will have to rebuild your credit, but its a clean slate.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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