What is Chapter Seven bankruptcy? This is also known as the straight bankruptcy or liquidation. This is used when you no longer have the capacity to settle your debts from the income you have.

The is a whole variety of reasons why you are unable to the pay your debts the most common being that you have lost your employment, the business is not doing so well, you have recently had to pay high medical bills etc.

Individuals as well as businesses can use chapter 7 bankruptcy and the reason they choose the liquidation route is because they want a fresh financial start.

You can only qualify for chapter 7 bankruptcy if you fulfill the means test. This is based on the earnings of the family in that particular state. If the family has an average income for a family that size in the state that it resides in, they are likely to achieve the criteria for chapter seven bankruptcy. If they are unable to fulfill this test that there are a few other means test that can be applied before they can be rejected for chapter 7 bankruptcy.

The other criteria’s for liquidation is that you must not have been granted bankruptcy in the last six years, if you have been rejected for bankruptcy you cannot file again for another six months and you must have your business or live within the United States.

The process involved with this bankruptcy is generally very complex, however Chapter seven seems to be the easiest out of all the bankruptcy procedures.

The court will appoint a bankruptcy trustee to oversee the whole bankruptcy procedure, in which the trustee will gather information of all your non-exempt assets and will liquidate those assets to pay your creditors. However, most of the people or businesses that file under Chapter 7, do not have any many assets to pay their creditors, especially unsecured creditors.

Once the bankruptcy trustee has all it’s information they will arrange to conduct a meeting with your creditors, this is also called a 341 meeting, in which they will disclose how much they are able to pay the creditors to enable them to discharge their debts. As it is unlikely that you will have assets to cover all your debts, the creditors will have to agree a percentage or an apportionment of the debt in full and final settlement of your account.

One of the conditions of filing for chapter seven bankruptcy and for a chapter 13 bankruptcy for that matter, you must also attend credit counseling from an approved credit counseling agency, which is approved by the Government. This must be done at least 6 months prior to filing your bankruptcy documents in to court.

Once you have been granted your chapter seven bankruptcy, you have then been given your fresh financial start and it is then your turn to put in action your life after bankruptcy. By re-establishing credit lines, reaffirming any loans you may still have and commence employment if possible.

You must be aware that after you have been granted a Chapter 7 bankruptcy, this will be listed for 10 years and will effect your credit rating that is why it is so important to re-establish them as soon as possible and it is possible. There is no reason why you cannot get an excellent credit score within 4-6 years.

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Mr/Mrs Know it all!!!

Admittedly, to own and run your own business you need to know a lot. However, you can’t know everything and believing someone else situations will help your circumstances is not productive. The purpose of retaining a lawyer is to ask them what needs or could be done in a situation or a potential problem.

Trying to solve a situation yourself can quite often lead to the problem worsening, which then involves your lawyer spending more time and effort sorting the matter out, then what would have originally taken.

Have a lawyer that will tell you what is correct

The whole point of having a lawyer, is that they will give you an objective view on matters by providing the pro’s and con’s of a given situation. It helps no one to have a lawyer who only sees or agrees with your side just to keep you happy. They do not make good lawyers as they can not cover all the angles to help you to be successful in your business.

Let them know that you need help or advise.

Instead of having a lawyer butting in, in your negotiations to advise you ad – lib, is better to ask their advise before you go into your meeting having discussed the full situation with your lawyer. This makes you more knowledgeable and inevitable you will come across as if you know what you are doing. Which is ultimately better for you.

If you are unsure what to say or do why don’t you let your lawyer take over they are not there to make you look inadequate, they are honestly there to protect your best interest. As your success is ultimately their success.

Clients often forget that there are client-attorney privacy laws and that no one else has the right to know what the two of you speak about. You’ve hired an attorney; you pay your attorney, so use your attorney when you need to. Get your Get your Legal Documents Online for up to 85% less than Lawyer Fees
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