The federal bankruptcy laws are complex, and an experienced advocate can help you navigate them efficiently. If you are contemplating filing for bankruptcy, contact an experienced bankruptcy attorney.
Chapter 7 bankruptcy protection enables qualified individuals to wipe away or discharge unsecured debts, while keeping most — if not all — of their possessions. At the Tennessee law office of Mark T. Young & Associates, we provide comprehensive Chapter 7 bankruptcy representation. We invite you to learn more about how Chapter 7 protection may be the best solution for your financial situation.
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Frequently Asked Questions about Chapter 7 Bankruptcy
Q: How does Chapter 7 liquidation work?
A: In a Chapter 7 case, the debtor must relinquish his or her nonexempt property to a bankruptcy trustee, who then converts the property into cash by selling it and pays the debtor's creditors from the sale proceeds. In return, the debtor receives a Chapter 7 discharge of certain debts if he or she is eligible for such a discharge, pays the filing fee, completes a personal financial management course and obeys the court's directives.
Q: Are all debtors automatically eligible for a Chapter 7 discharge?
A: No. A debtor may not be eligible for a discharge under Chapter 7 if he or she has been granted a discharge in a Chapter 7 case within the last eight years. Debtors who engage in certain fraudulent conduct related to the bankruptcy or their financial situation also may not be eligible for discharge. In addition, if the debtor refuses to answer questions or obey orders of the bankruptcy court, the court may refuse to grant a discharge.
Chapter 7 Bankruptcy - An Overview
Both individuals and businesses may find themselves with more debts than they can pay when due. In such cases, filing for bankruptcy may provide a solution to what seems like an insurmountable problem. Bankruptcy provides two basic forms of relief: (1) liquidation and (2) rehabilitation, also known as reorganization. Most bankruptcies filed in the United States involve liquidation, which is governed by Chapter 7 of the Bankruptcy Code. An attorney at Mark T. Young & Associates in Hixson, TN, can advise individuals and businesses about whether Chapter 7 is the right choice for them. The bankruptcy lawyer's goals are to help Chapter 7 debtors make a fresh start and ensure that creditors are paid.
Bankruptcy Abuse Prevention and Consumer Protection Act
On April 20, 2005, President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), which instituted substantial changes to the Bankruptcy Code. Most provisions of BAPCPA became effective in October 2005. BAPCPA's provisions make it more difficult to file for Chapter 7 and impose many additional requirements on debtors in an effort to exclude debtors who can pay their creditors from Chapter 7. Under the amendments to Section 707(b), a bankruptcy case should be dismissed if the debtor is found to be "abusing" Chapter 7 relief. Prior to the BAPCPA, the word "substantially" was included immediately before "abuse" in the test.
Discharge Under Chapter 7
"Discharge" in the bankruptcy sense refers to clearing the debtor's slate of all, or most, past debts. Although many people expect that filing for bankruptcy will wipe out all of their debts, that is not always the case. Bankruptcy only discharges certain debts. The availability of discharge depends on the type of bankruptcy proceeding involved, who the debtor is and what type of debts the debtor has.
Exempt vs. Non-exempt Property Under Chapter 7
In a Chapter 7 liquidation case, the debtor must relinquish certain property to the bankruptcy trustee so that he or she can sell the property and use the proceeds to pay off debts. Property of the bankruptcy estate is broadly defined under Section 541 of the Bankruptcy Code. The estate is technically the legal owner of all the debtor's property and consists of all legal and equitable interests that the debtor has in property at the initiation of the bankruptcy case. Income that the debtor earns after the date of the petition is not included in the estate. Debtors, whether they are businesses or individuals, are often justifiably concerned about what property they will be allowed to keep and what they must give up.
Chapter 7 Resource Links
U.S. Bankruptcy Courts
A brief overview of the structure and function of bankruptcy courts.
Bankruptcy Basics: Chapter 7
Basic overview of liquidation under Chapter 7 of the Bankruptcy Code.
Bankruptcy: An Overview
A general overview of the topic of bankruptcy, along with state and federal materials, from Cornell University.
U.S. Bankruptcy Courts by State
Links to U.S. Bankruptcy Court sites.
Official Bankruptcy Forms
From the Administrative Office of the U.S. Courts.
