Chapter 7 Bankruptcy is commonly referred to as “straight liquidation”. What this means is the Chapter 7 Trustee will take all of your “non-exempt” property, if there is any, and sell it to pay your debts; however, in 98% of the cases handled by this firm, there is no “non-exempt” property for the Trustee to sell. Only in very, very unusual circumstances does anybody lose property to the Trustee, because the property is “non-exempt”.
In order to keep secured property in a Chapter 7, you must, usually, be current on your payments, enter into a “re-affirmation agreement” with the secured creditor and continue making your payments. A Chapter 7 will wipe out all of your dischargeable debts. Bankruptcy law defines exemptions, non-dischargeable debts, and dischargeable debts.
Chapter 7 Bankruptcy Arkansas
Chapter 7 Bankruptcy For Businesses
When a business can no longer pay its creditors, it may file for Chapter 7 in a federal court. Filing Chapter 7 states that the business ceases it’s operations unless continued by a trustee. Typically, the court appoints a trustee as soon as possible and generally sells all assets to pay creditors.
When very large businesses enters Chapter 7, the company may be divided up into portions that can be sold to other companies. Therefore, not all employees will need to look for a new job.
Chapter 7 Bankruptcy For Individuals
Chapter 7 for individuals is generally called a “straight bankruptcy” in which the individual is permitted to keep certain exempt property. Most liens, such as real estate mortgages and auto loans, are not exempt. Exemptions vary from state to state, so it’s important to contact an experienced Arkansas bankruptcy lawyer if you live in the state of Arkansas. If there are any assets, they are sold by the trustee to repay creditors.
Generally, a bankruptcy stays on the individual’s credit report for up to 10 years. This can affect an individual’s credit unfavorably, although other factors can also scar your credit rating such as high debt. Consumer creditworthiness is a complicated matter in and of itself, and ability to obtain credit in the future depends on many factors, making this hard to predict. Creditworthiness is only one issue to consider when determining whether to file a Chapter 7 bankruptcy.
How to File Chapter 7 with No Money
Depending on your case’s complexity, you may not require the assistance of a bankruptcy attorney. It also depends on how comfortable you are with filing for bankruptcy on your own. However, keep in mind that bankruptcy laws are very complex and require extensive forms that include various legal jargon. In fact, you may end up losing all your assets or not clearing up all your debts.
You may be able to file Chapter 7 by obtaining assistance from a legal aid society, utilizing a pro bono attorney, or paying attorneys through a repayment program.