It is a common mistake to assume that when people talk about bankruptcy, they all mean the same thing. The fact is that there are several different forms and processes of bankruptcy. One of the forms of bankruptcy often over looked is Chapter Seven Bankruptcy, commonly referred to as liquidation bankruptcy.
Although not the fastest form of bankruptcy to process - taking up to six months to process fully, due to its complexity - it is certainly not the most complex nor the most long winded of all the bankruptcy processes.
As stated, Chapter Seven bankruptcy is commonly referred to as liquidation bankruptcy. This is because part of the process of declaring yourself bankrupt under the terms of Chapter Seven bankruptcy involves the liquidation of most, or all, of your assets in order to clear your debt. Some possessions may be retained by the individual; the value of this would vary from state to state, and depending on what the value of the items and the overall debt level. It would be highly unusual for an individual claiming Chapter 7 bankruptcy to retain their real estate - homes are almost always liquidated.
Different forms of bankruptcy suit different personal situations, Chapter 7 bankruptcy particularly suits individuals who have amassed substantial assets but who also have very high debt levels. Those with little assets would not benefit best from Chapter Seven bankruptcy; it really suits those with large value assets, such as homes, cars, art work etc.
Prior to beginning the bankruptcy process, it would be advisable to talk through your options with someone familiar with the different forms of bankruptcy - a lawyer or financial advisor perhaps; there are many different options open to you, even once you have decided on bankruptcy.
Setting up Chapter Seven bankruptcy involves selecting either an individual or a company to act as a trustee for the bankruptcy process. The trustee would be responsible for the selling of the assets of the individual claiming the bankruptcy. This is a position of some responsibility.
Since the process of Chapter 7 bankruptcy is complex in its legalities, it would be required that anyone filing for this type of bankruptcy contact a qualified lawyer. Laws on bankruptcy vary from state to state, so it would be important that anyone claiming for Chapter Seven bankruptcy find a lawyer with experience in their state.
There are many criteria that must be met before you can begin the bankruptcy process, a trained lawyer will understand the criteria for your state and advise you on whether or not you qualify for Chapter Seven, or for any other type of bankruptcy.
Chapter Seven bankruptcies can take a long time to process, primarily because the trustee needs to sell off the possessions of the individual claiming bankruptcy in order to pay off the creditors. This process can take some time to ensure a best price is received for each item.
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