When someone is suffering with overwhelming debt, one of the best ways to obtain debt relief is by filing for bankruptcy. In many cases, a debtor may be able to prevent liquidation of all personal assets in order repay creditors, but in some situations creditors may demand that a debtor liquidate all assets in order to repay debt. Such cases are handled according to the guidelines of Chapter 7 of the United States Bankruptcy Code and such types of bankruptcy filings are known as Chapter 7 bankruptcy filing.
Chapter 7, or liquidation, bankruptcy is an effective tool for eliminating all unsecured debts such as credit card debt, medical debt and outstanding personal loans. While it is true that assets must be liquidated in a Chapter 7 filing, it does not mean that a debtor will lose all of the person’s assets. This is because various federal and state exemptions permit a debtor to retain possession of many valuable assets. Chapter 7 bankruptcy for individuals can take four to six months and a debtor needs to go to a bankruptcy court only once.
The Chapter 7 bankruptcy process for small businesses is similar to Chapter 7 filings for individuals, which means that the filing requires a liquidation of the business’s assets in order to repay creditors. However, it is important to know that a business bankruptcy under Chapter 7 is only possible for certain small and medium business where the owners’ finances and the business’s finances are closely linked to each other. Otherwise, the business has to file for bankruptcy under other chapter of the Bankruptcy Code.
There is plenty of information and advice available on various platforms for people who plan to file for bankruptcy but the fact remains that the process is full of legal complications. Therefore, if an individual wants to know more about such filings, a visit to our law firm’s page about bankruptcy overview may help. A visit to the page will not only enhance the knowledge regarding bankruptcy but can also help a person to make an informed decision about using professional guidance.