Chapter 7 bankruptcy also referred to as ‘straight bankruptcy’ is a situation where the debtor hands over all their surviving property to a bankruptcy trustee. It is converted in to cash by the trustee in order to allocate amongst the creditors. The debtor in the case of a chapter 7 bankruptcy receives a release of all dischargeable debts within approximately four months. Since they have lost it all, many people who claim Chapter 7 bankruptcy will not receicne a large sum of money . This will mean a new beginning for the bankruptcy party is required.

In order to be eligible to file for chapter 7 bankruptcy, the debtor must be an individual, partnership or corporation or other business unit. A sole individual though cannot file under chapter 7 bankruptcy information. An exception is made only if the debtor receives credit counseling from an approved agency within 180 days before filing for chapter 7 bankruptcy. The debtor must fill out a petition with the bankruptcy court regarding their assets in order to receive Chapter 7 bankruptcy. A schedule of assets and liabilities, a schedule of current income and expenditures and a statement of financial affairs with the court must also be filed in addition .
Ah honest individual should be given a new beginning is the concept behind bankruptcy. Therefore the debtor is not legally responsible for discharged debts. In the case of discharging under chapter 7 bankruptcy, it should be known that it is only an option for individual debtors as opposed to the previously mentioned scenario. Though this is the general procedure, an individual’s right of discharge is not to be taken for granted as some categories of debts are not discharged.

It is a smart option to figure the best choice for you regarding the chapter 7 bankruptcy, with the help of a qualified attorney. First though you need to figure out for yourself if you actually need to file for bankruptcy. Online evaluation forms are also available. Always make sure that you provide your attorneys with complete and correct information to gain a better evaluation on your case. It is also essential to remember that the debtor receives a discharge on all dischargeable debts in chapter 7 bankruptcy. Although in some instances, one might lose his all assets, in other cases it might not be the case. Therefore it is essential that you have a bankruptcy attorney before making any rash decisions.

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