Understanding Chapter 7 Bankruptcy
Typically, Chapter 7 is referred to as “liquidation” because you turn over nonexempt property to the trustee assigned to your case. The confusion lies in the fact that most property is exempt.
Let a lawyer at our firm, Debra Booher & Associates, help you understand Chapter 7 and other bankruptcy options. Contact us today.
Keep Your Property With Chapter 7
Exempt property means it is not subject to attachment by creditors or in a bankruptcy, which means you get to keep it. The exemptions vary by state, and you should consult a bankruptcy attorney to determine what property may be claimed exempt in your state.
In most situations, if you wish to keep houses or your car or other vehicles, you simply maintain your payments as scheduled to the creditor. Chapter 7 is generally the simplest and quickest form of bankruptcy. Most people receive their discharge within five to six months of filing the case.
How Does Chapter 7 Work?
The theory in Chapter 7 is that all nonexempt assets are turned over to the trustee to be liquidated for funds to distribute to creditors. In reality, however, this only occurs if the debtor does not wish to “buy back” the property. Hence, suppose a debtor has a nonexempt widget worth $1,000 which he would like to keep. Rather than sell to someone else, the trustee is normally perfectly willing to sell back to the debtor for whatever price he could obtain from a third party.
The debtor may actually get a better deal because the trustee incurs no costs of sale, and in many circumstances, payments can be spread out over a short period of time. When someone has nonexempt property that cannot be protected in a Chapter 7 bankruptcy or if someone has sufficient disposable income to pay a significant portion of their debt over time, Chapter 13 bankruptcy may provide an alternative form of debt relief.
Contact Our Bankruptcy Offices In Northeastern Ohio
Debra Booher & Associates is one of the leading consumer bankruptcy law firms in northeastern Ohio because our experienced lawyers file more than 2,000 bankruptcy cases per year for clients in the region. We will explain things clearly, including your bankruptcy options, in order to help you take the right course of action for your situation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.