Filing for Bankruptcy under Chapter 7
Jun 8th, 2008 by shop-universal-best-buy
Filing for Bankruptcy under Chapter 7
Chapter 7 forms part of the United States Bankruptcy code. The United States Bankruptcy code is made up of 11 parts and is sometimes known as liquidation bankruptcy. The whole process of Chapter 7 bankruptcy takes four to six months and costs an average of about $299 from filing and administration fees.
By filing for Chapter 7 you are placing your property and debts into the hands of a bankruptcy court; however in order to be considered to apply for Chapter 7 you must undergo a ‘means test’ in order to qualify for Chapter 7 Bankruptcy. This means test is how the Internal Revenue Service (IRS) determine who can and who cannot file for Chapter 7. To determine this your income and expenses are examined in detail to see how they compare to the standard for your area as set out by the IRS. If you earn less than the median income for a family of your size in your state, you can automatically file for Chapter 7 bankruptcy; however if your income from the last six months is greater than the median income and you can pay at least $6,000 over five years or $100 a month toward your debt, you are not allowed to file for Chapter 7 but must file for Chapter 13 instead. Chapter 13 will require you to repay a portion of your debts over three to five years.
So what happens within the process of filing for Chapter 7 bankruptcy? In order to file for this bankruptcy you need to fill out a petition and as well as a number of other forms, all of which should be filed with the bankruptcy court in your area. To help you gain an idea of what to expect when you are filling in these forms you should keep in mind the following points:
• Your property
• Your current income and monthly living expenses
• Your debts
• Property you claim the law allows you to keep through the bankruptcy process (called “exempt property”) — most states let you keep some equity in your home, clothing, household furnishings, Social Security payments you haven’t spent, and other necessities such as a car and the tools of your trade.
• Property you owned and money you spent during the previous two years
• Property you sold or gave away during the previous two years.
These are just a few examples of the sort of things that these forms will ask you about when you are filing for bankruptcy under Chapter 7.
Once you have either filed for bankruptcy or had a bankruptcy proceeding brought against you it should be noted that you can’t sell or give away any of the property that you own at the time of filing for Chapter 7 bankruptcy. You also can’t pay off any debts that you had prior to filing for bankruptcy without the courts consent. However, with a few exceptions, you can do what you wish with property you acquire and income you earn after you file for bankruptcy.
Helen is the web master of Edge of Bankruptcy, specialists in all aspects of Chapter 7 and all aspects of Bankruptcy.
Filing for Bankruptcy under Chapter 7 / Author: Helen
