Rules For Involuntary Chapter 7
Chapter 7 bankruptcy is for people who are looking for relief from debtors. It puts a stay on all creditors until a satisfactory solution has been reached based on your financial status. It will keep the creditors away from you and your possessions legally until a proper solution is available. |
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People, who usually file for bankruptcy under this Chapter, are the ones who are facing a foreclosure. It has become a common way out for such people. Also, people who cannot pay their auto loans and any type of insecure loans opt for this procedure to escape the harassment of creditors and their nagging phone calls.
In this case, a trustee gathers all your non exempt assets and disposes them off to clear the debts. In this process the bankruptcy odes are adhered to closely. However, the laws and rules of Chapter 7 bankruptcy allow you to retain some property or assets that are exempt. You will need to specify them while filing. The bankruptcy laws allow several assumptions, and you can check them on your State’s court website.
Actually in Chapter 7 bankruptcy cases, almost 90 percent of them are voluntary. Under involuntary cases, the rules and advantages are more. However, it solely depends on your holdings and debts. The court issues a stay order on all your creditors indefinitely until it reaches a decision about your status. It could take 20 days to 40 days, or even 60 days occasionally. A trustee is appointed to dispose the creditors and make a decision about payments.
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