Chapter 7 Bankruptcy Lawyer Idaho
Chapter 7 bankruptcy is a liquidation proceeding intended for use by individuals seeking relief from consumer debt. According to Stephen P. Parsons, author of The ABCs of Debt, the most striking effect of the new 2005 bankruptcy law was to impose new restrictions on individuals seeking to file Chapter 7 liquidation bankruptcy. The new bankruptcy laws force more consumers to file Chapter 13 reorganization cases instead of Chapter 7 liquidation cases.
Basics of Chapter 7 Bankruptcy
As Parsons explains, Chapter 7 bankruptcy involves the sale (liquidation) of all or most of the debtor's nonexempt property by a court-appointed bankruptcy trustee. The bankruptcy trustee then distributes the proceeds of the sale to the debtor's various creditors. The debtor gives up all nonexempt property in the liquidation proceeding, but in exchange the debtor receives a permanent discharge from liability for most of his or her debts.
Exempt Property: Property that Cannot be Seized for Bankruptcy Liquidation
Parsons points out that the Chapter 7 bankruptcy trustee cannot seize a debtor's exempt property and sell it for the benefit of creditors. Exempt property may include such things as a certain amount of equity in one's home, vehicle and household goods. Also exempt are Social Security and Veteran's benefits. Exemptions may vary by state, and one should consult a bankruptcy attorney for advice concerning what property is exempt in one's jurisdiction.
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