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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Types of Powers of Attorney

There are two types of powers of attorney. A “general” power of attorney is unlimited in scope and duration, and permits the named individual to act as your legal representative in relation to financial matters until such time as it is revoked.

A “specific” power of attorney imposes limits upon the named representative, and may restrict the scope of that person’s powers to a single type of conduct or a single transaction. For example, the representative might be used to sign the contracts on a real estate transaction or to deal with financial commitments while abroad.

It is possible to have a duration on the time a Power of Attorney is affective. Stop date can be drafted in to the document and will prevent the abuse of the power.

Power of attorney’s do not have to be registered with the state. However, if a power of attorney grants somebody the right to engage in transactions relating to real estate, it may be necessary to record the form.

Terminating a Power of Attorney

The Power of Attorney can be terminated at any time and the process can be instant, in all that has to be done is  destroy the original powers of attorney and any copies and inform the attorney that the Power of Attorney no longer exists.

When Does a Power of Attorney Become Effective?

A Power of Attorney will become effective at the time it is signed. However there are some Power of Attornies that can be become effective on a future date or upon a specific event.

Planning for Medical OR Mental Incapability

A Power of Attorney is sometimes made in anticipation of a medical or mental emergency or incapability. You may find that you are in a position where you are unable to articulate your own wishes, a medical power of attorney allows you to choose in advance who will represent your interests, and can impose upon them the restrictions you wish. You may want the Power of Attorney to be used in conjunction with a Living Will where the Attorney uses the instruction from the living will to carry out and deal with the financial transactions using the Power of Attorney.

Most people who engage in estate planning in anticipation of possible incapacity or disability obtain both a medical power of attorney and a general power of attorney. This usually allows a trusted person to take care of your finances. As with the medical power of attorney, if there is a lack of any specific instructions the court will appoint somebody to represent your interests.

Please note that powers of attorney issued for the purpose of managing your assets in the event of disability or incapability are always drafted with an indefinite time period and are known as “durable” powers of attorney. Many financial institutions are reluctant to accept or rely upon powers of attorney, which expire after a specific date, and some will refuse to accept them.

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