Chapter 7
The main purpose of chapter 7 bankruptcy is to discharge unsecured debt (with certain exceptions) and to give a person a "fresh start." Chapter 7 bankruptcy is technically called a liquidation or "straight" bankruptcy, but in the vast majority of cases, no property is liquidated and are "no asset" cases. If a person has property that would be liquidated in a chapter 7 case, he would normally instead file a chapter 13 or chapter 11 reorganization case. In chapter 7, a debtor is allowed to keep his "exempt" property. The best known exemptions in Florida are the homestead, a $1,000.00 - $5000.00 of personal property, $1,000.00 of equity in a vehicle, and certain retirement and IRA plans.
A chapter 7 case is started with the filing of a petition, schedules, statements of financial affairs, and other documents with the Bankruptcy Court. A joint chapter 7 case may be filed together by a husband and wife in order to save the expense of filing two separate cases. The schedules include listings of the debtor's property, claimed exempt property, creditors, and budget.
The filing of a chapter 7 case imposes the "automatic stay" which stays or stops most collection activity against the debtor and his property. Certain types of action are not stayed.
During the case, a "creditor's meeting" is held presided over by a chapter 7 trustee. At this meeting, the debtor is asked various questions about his financial affairs while under oath. Most creditors do not take the opportunity to attend this meeting.
A chapter 7 discharge provides for the discharge of an individual's dischargeable debt. The discharge prohibits the creditor from pursuing discharged debt. Typical nondischargeable debt include alimony, child support, certain taxes, and certain student loans.
A chapter 7 case is started with the filing of a petition, schedules, statements of financial affairs, and other documents with the Bankruptcy Court. A joint chapter 7 case may be filed together by a husband and wife in order to save the expense of filing two separate cases. The schedules include listings of the debtor's property, claimed exempt property, creditors, and budget.
The filing of a chapter 7 case imposes the "automatic stay" which stays or stops most collection activity against the debtor and his property. Certain types of action are not stayed.
During the case, a "creditor's meeting" is held presided over by a chapter 7 trustee. At this meeting, the debtor is asked various questions about his financial affairs while under oath. Most creditors do not take the opportunity to attend this meeting.
A chapter 7 discharge provides for the discharge of an individual's dischargeable debt. The discharge prohibits the creditor from pursuing discharged debt. Typical nondischargeable debt include alimony, child support, certain taxes, and certain student loans.