For Individuals:

Chapter 7 is the most popular form of bankruptcy in America. In 2009 there were over 800,000 filings for chapter 7, which is more than double the filings for chapters 11, 12, and 13 combined. It is so popular because Chapter 7 offers debtors a way out. If you are having trouble making payments and making ends meet, The Levine Law Firm, LLC can help you.

Immediately after filing chapter 7, the court notifies creditors, and an automatic stay takes effect. The stay prevents creditors listed in the petition from taking action to collect their debts or otherwise enforcing their rights. An appointed trustee can take possession of the debtor’s non-exempt property and distribute it among creditors. However with most chapter 7 cases, all property is exempt, which allows the debtor to keep most of what they have and walk away with a fresh start.

The policy behind United States bankruptcy law is to allow an honest debtor to start anew without financial burden. In Chapter 7, most debts can be discharged, or in other words disappear. As long as it is an honest claim, medical bills, loans, credit card purchases, and cash advances and more may all be discharged.

Certain debts under chapter 7 cannot be discharged. These can include taxes, alimony, child support, student loans, criminal fines, debts related to drunk driving, debts not listed in the bankruptcy petition, and certain debts incurred within 60 days of filing the petition.

Debtors do actually keep all of their property in most Chapter 7 cases. The bankruptcy code aims to give a fresh start, not to punish. If the debtor has expensive cars or jewelry, these can be sold to recover some of the debt. If a debtor can not pay their mortgage, and if it will be profitable to do so, their home may be sold to help repay debts.

Bankruptcy does put a bad mark on your credit rating, but so does not making payments on loans and debts. The overall effect of bankruptcy is actually less harmful than living with debt. A person has no debt after bankruptcy, and cannot file again for 6 years. So many prospective lenders feel that a recently discharged debtor is less of a risk than a one buried in debt. If you are in a hole and swamped by creditors, don’t keep digging. Let the law and The Levine Law Firm, LLC help you out of debt by filing chapter 7.

For Businesses:

Filing chapter 7 for a business can be summed up in one word, liquidation. There are other options for those businesses that do not wish to go this route, mainly chapter 11. Under chapter 7 the company ceases all operations and goes out of business. A trustee is appointed to liquidate, or sell, all of the company’s assets and is used to pay off the debt. Secured creditors, such as banks, are paid first. Unsecured creditors such as other banks, suppliers, and bondholders, have the next claim. Stockholders and owners of the company have the last claim on assets. They may not receive anything if the secured and unsecured creditors are not fully repaid. If your business has problems that are so serious that it cannot continue operations, Chapter 7 may be the only option. Give The Levine Law Firm, LLC a call to help you make the most of what remains by filing chapter 7 and liquidating the company’s assets.