The most common form of bankruptcy in the United States is Chapter 7 Bankruptcy. This form of bankruptcy is brought upon by the fact that the business or individual is unable to pay off the enormous amount of debt that the debtor owes the creditor.
Below are some items that elaborate and present informational facts on what you should know when considering filing a chapter 7 bankruptcy:
1. Chapter 7 Bankruptcy is the most popular form of bankruptcy.
The liquidation of assets that occur under the Chapter 7 Bankruptcy Code is the most common type of bankruptcy.
2. All debts are liquidated, except for various taxes and alimony payments.
When filing chapter 7 bankruptcy, the debtor should be aware that it is not an easy way out of all debt. There are certain exclusions involved. For example, the debtor will still be responsible for paying various taxes and will also be held liable for making alimony payments.
3. Once assets are sold to the creditor, the debtor is free of liability.
Free of liability is not entirely true. Chapter 7 bankruptcy filings do not eliminate all debt. In actuality, the creditor is allowed to liquidate all assets from the debtor once it is decided that the debtor is unable to pay off the debt that has been accrued. Once these assets have been liquidated and the creditor has been compensated, then the debtor is free from liability.
4. Other names for Chapter 7 Bankruptcy.
“Liquidation Bankruptcy” and “Straight Bankruptcy” are two common terms that are synonymous with the term Chapter 7 Bankruptcy.
5. It will show up on your credit report.
One of the adverse effects of filing for a chapter 7 bankruptcy is that the record will appear on your credit report. As a result, this will give you a bad credit rating that could affect your future.
6. Provides the debtor with a fresh start.
Although the adverse credit history that results from filing a chapter 7 bankruptcy can make future credit ventures troublesome, the fact remains that the elimination of pre-existing debt does indeed provide the debtor with a fresh start, free of owing any current debts or obligation of debt.
7. Chapter 7 Bankruptcy was once referred to as Chapter 8.
Chapter 7 Bankruptcy was once referred to as chapter 8.
If you would like more information and resources about the Chapter 7 Banrupcy, be sure to check out the great resources and information at: http://www.chapter-7-bankrupcy.com
In addition, you can greatly benefit learning about Chapter 13 as well. Learn more about chapter 13 bankruptcy at http://www.chapter-13.org.
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