Monday, April 20, 2009

What is Chapter 7?




Posted By: Asim Mohammed
According to the United States Bankruptcy Code there are different “chapters” to file under, chapter 7 and chapter 11 and chapter 13. People have always heard of the chapter 11 on the news for when corporations or businesses are in trouble. One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a fresh start. One of the most common forms of bankruptcy is chapter 7. Chapter 7 governs the process of liquidation under the bankruptcy laws of the United States. Under chapter 7, the bankruptcy trustee will gather and sell the debtor’s assets and uses the proceeds of such assets to pay creditors in accordance with the provisions of the Bankruptcy Code. Part of the debtor's property may be subject to liens and mortgages that pledge the property to other creditors. Also, filing under chapter 7 may result in a loss of property. In order to qualify under chapter 7, debtor may be an individual, a partnership, or a corporation or other business entity. Chapter 7 has different laws for businesses filing to individuals filing. There is a certain process that requires someone to fill out forms in court to people preparing the bankruptcy proceedings and going through the court system.




http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter7.html


http://en.wikipedia.org/wiki/Chapter_7,_Title_11,_United_States_Code


http://www.investopedia.com/ask/answers/190.asp

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