Bankruptcy Laws
 

Chapter 7 Bankruptcy

Chapter 7 bankruptcy used to be the most popular form of personal bankruptcy. However the new chapter 7 bankruptcy laws make filing a Chapter 7 bankruptcy harder for some people. Nowadays, those who cannot file for a Chapter 7 bankruptcy will have to file for a Chapter 13 bankruptcy.

The new Chapter 7 bankruptcy law

 

Chapter 7 Bankruptcy

First let us define what a Chapter 7 bankruptcy is and why it has been so popular. In a Chapter 7 bankruptcy, the person filing bankruptcy gives all of his or her properties to the bankruptcy court. The bankruptcy trustee appointed for the Chapter 7 bankruptcy case will sell all properties and then distribute all the money to the creditors.



Can the creditors still harass me after a Chapter 7 bankruptcy?

By the chapter 7 bankruptcy law, once a Chapter 7 bankruptcy is filed, the creditors cannot harass you or collect any more. Once the Chapter 7 bankruptcy trustee appointed for your case has finished distributing the money from all the sales of your properties, the creditors get nothing else.

Will I lose everything in a Chapter 7 bankruptcy if I file for it?

Although under a Chapter 7 bankruptcy, you are supposed to give all your assets to the bankruptcy trustee to sell and distribute the proceeds. In reality, this rarely happens. A Chapter 7 bankruptcy is governed by 2 sets of bankruptcy laws: the federal bankruptcy laws and the state bankruptcy laws. You need to check into the bankruptcy laws in your state. Some states allow anyone undergoing Chapter 7 bankruptcy to keep more assets than others. A homestead exemption law, for example, allow bankruptcy filers to keep their home.

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