Things To Know About Chapter 7 bankruptcy laws
To file for Chapter 7 bankruptcies, the debtor files a petition with the bankruptcy court serving the area where the debtor lives or where the business debtor operates the business, or where the debtor has most of their assets. You are permitted to retain certain "exempt property" but all remaining assets are liquidated (sold) by the bankruptcy court Trustee. You should also understand that if you file a chapter 7 bankruptcy you could loose some or all or your property! This may be an advantage or disadvantage depending on how much equity you have in the asset.
Chapter 7 bankruptcy provides an "order of relief" that triggers an "automatic stay" thus all creditors and collectors are prohibited from pursuing you or your property outside of the bankruptcy proceeding. This is especially important if you've received a foreclosure notice.
You are permitted to retain certain "exempt property" but all remaining assets are liquidated (sold) by the bankruptcy court Trustee. You should also understand that if you file a chapter 7 bankruptcy you could loose some or all or your property! This may be an advantage or disadvantage depending on how much equity you have in the asset.
The debts of the corporation or partnership theoretically continue to exist until applicable statutory periods of limitations expire. In the case of fraud, (for example, charging up credit cards with the intent to file a bankruptcy) the court may deny the discharge of the debt. For the court to take such drastic measures to limit or deny the discharge in a Chapter 7 proceeding, the creditor has the burden of proving that the debtor obtained credit by fraudulent practices or has engaged in other prohibited behavior. In a Chapter 7 case, a corporation or partnership does not receive a bankruptcy discharge-instead, the entity is dissolved. Only an individual can receive a Chapter 7 discharge. Once all assets of the corporate or partnership debtor have been fully administered, the case is closed.
Statutory exceptions of non- dischargeable debt generally includes back taxes less than three years old, student loans, alimony, and child support. Often these debts will be liquidated with the use of a CRO. This is a court appointed officer who is required to auction the properties of the concerned company. In the case of L.I.D. for example, the CRO was Consensus Advisors LLC. They performed an initial due diligence to find a suitable "stalking horse bidder." The stalking horse bidder was then required to provide a guarantee that at some minimum "reserve" price they would purchase all or part of the inventory.
In a Chapter 7 filing, once the property distribution occurs, the court will most likely discharge the debtor from further repayment obligations to the unsecured creditors. However, there are some exceptions to this general rule. The discharge of the debt may not be allowed by the court if evidence shows the debtor used fraudulent behavior to incur the debt.
Chapter 7 bankruptcy provides an "order of relief" that triggers an "automatic stay" thus all creditors and collectors are prohibited from pursuing you or your property outside of the bankruptcy proceeding. This is especially important if you've received a foreclosure notice.
You are permitted to retain certain "exempt property" but all remaining assets are liquidated (sold) by the bankruptcy court Trustee. You should also understand that if you file a chapter 7 bankruptcy you could loose some or all or your property! This may be an advantage or disadvantage depending on how much equity you have in the asset.
The debts of the corporation or partnership theoretically continue to exist until applicable statutory periods of limitations expire. In the case of fraud, (for example, charging up credit cards with the intent to file a bankruptcy) the court may deny the discharge of the debt. For the court to take such drastic measures to limit or deny the discharge in a Chapter 7 proceeding, the creditor has the burden of proving that the debtor obtained credit by fraudulent practices or has engaged in other prohibited behavior. In a Chapter 7 case, a corporation or partnership does not receive a bankruptcy discharge-instead, the entity is dissolved. Only an individual can receive a Chapter 7 discharge. Once all assets of the corporate or partnership debtor have been fully administered, the case is closed.
Statutory exceptions of non- dischargeable debt generally includes back taxes less than three years old, student loans, alimony, and child support. Often these debts will be liquidated with the use of a CRO. This is a court appointed officer who is required to auction the properties of the concerned company. In the case of L.I.D. for example, the CRO was Consensus Advisors LLC. They performed an initial due diligence to find a suitable "stalking horse bidder." The stalking horse bidder was then required to provide a guarantee that at some minimum "reserve" price they would purchase all or part of the inventory.
In a Chapter 7 filing, once the property distribution occurs, the court will most likely discharge the debtor from further repayment obligations to the unsecured creditors. However, there are some exceptions to this general rule. The discharge of the debt may not be allowed by the court if evidence shows the debtor used fraudulent behavior to incur the debt.
About the Author:
John Steed has many decades of experience dealing with bankruptcy. To learn more about Bankruptcy Laws visit Bankruptcy-Laws.org where you can find more information on Bankruptcy Credit Cards and filing bankruptcy online.
posted by Debt Consolidation Loan at
10:10 AM
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