Chapter 7 Bankruptcy
A Chapter 7 bankruptcy is designed to “wipe clean” or discharge your unsecured debts after you have liquidated and paid to your creditors all of your non-exempt assets. Certain unsecured debts cannot be discharged in A Chapter 7 and it has no effect, good or bad, upon secured debts.
Chapter 7 of the Title 11 of the United States Code ( Bankruptcy Code ) governs the process of liquidation under the bankruptcy laws of the United States. ( In contrast, Chapters 11 and 13 govern the process of reorganization of a debtor in bankruptcy ). Chapter 7 is the most common form of bankruptcy in the United States.
The above definitions are meant to describe the setting for a bankruptcy. Our Chapter 7 Bankruptcy Attorney can explain the process so you can make an informed decision as to what is best for you. At BCN Law firm we offer a free consultation*. Call us at at 855-LAW-2020 today.
If you need this service and you are not in Lake County Florida than call either our Orange County Bankruptcy Attorneys or our Sumter County Bankruptcy Attorneys at 855-LAW-2020.
Chapter 7 Bankruptcy For businesses:
“When a troubled business is badly in debt and unable to service that debt or pay its creditors, it may file (or be forced by its creditors to file) for bankruptcy in a federal court under Chapter 7. A Chapter 7 filing means that the business ceases operations unless continued by the Chapter 7 Trustee. A Chapter 7 Trustee is appointed almost immediately. The Trustee generally sells all the assets and distributes the proceeds to the creditors.”
This may or may not mean that all employees will lose their jobs. When a very large company enters Chapter 7 bankruptcy, entire divisions of the company may be sold intact to other companies during the liquidation.
Fully secured creditors, such as collateralized bondholders or mortgage lenders, have a legally enforceable right to the collateral securing their loans or to the equivalent value, a right which cannot be defeated by bankruptcy. A creditor is fully secured if the value of the collateral for its loan to the debtor equals or exceeds the amount of the debt. For this reason, however, fully secured creditors are not entitled to participate in any distribution of liquidated assets that the bankruptcy trustee might make.
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 (see 11 U.S.C. Â§ 727 (a) (1)). Once all assets of the corporate or partnership debtor have been fully administered, the case is closed. The debts of the corporation or partnership theoretically continue to exist until applicable statutory periods of limitations expire. BCN’S Florida Bankruptcy Attorneys can help you determine if this is right for you.
Chapter 7 bankruptcy For individuals:
“If you reside, have a place of business, or own property in the United States you may file for bankruptcy in a federal court under Chapter 7 (“straight bankruptcy”, or liquidation). Chapter 7, as with other bankruptcy chapters, is not available to you if you who have had bankruptcy cases dismissed within the prior 180 days under specified circumstances.”
A Chapter 7 Bankruptcy stays on your credit report for 10 years from the date of filing the chapter 7 petition. This contrasts with a chapter 13 bankruptcy, which stays on your credit report for 7 years from the date of filing the chapter 13 petition. This may make credit less available and/or terms less favorable, although high debt can have the same effect. That must be balanced against the removal of actual debt from the filer’s record by the bankruptcy, which tends to improve credit worthiness. Consumer credit and credit worthiness are a complex subject, however. Future ability to obtain credit is dependent on multiple factors and difficult to predict.
Credit worthiness and the likelihood of receiving a Chapter 7 discharge are only a few of many issues to be considered in determining whether to file bankruptcy. Our Chapter 7 Bankruptcy Attorneys in Clermont will guide you in the right direction. The importance of the effects of bankruptcy on credit worthiness is sometimes overemphasized because by the time most debtors are ready to file for bankruptcy their credit score is already ruined.
It does not cost you anything to sit down and talk with one of our experienced Lawyers. At Boyette, Cummins & Nailos Law Firm, we will sit down with you and go over your options, even the ones that don’t include bankruptcy, and put together a plan of action to help make your future a little brighter. Call 855-LAW-2020 for a free consultation*.