Chapter 7 liquidation is a form of bankruptcy that is relatively common. It is an option for people that are unable to make their scheduled monthly payments toward the debts they owe. It is also available to businesses that want to end their enterprises.
As scary as the term bankruptcy can be, there are several advantages to filing for a Chapter 7 liquidation. First, it will provide some relief to debtors no matter how much money is owed. Furthermore, it does not matter whether the debtor is solvent or insolvent. Additionally, a Chapter 7 trustee is appointed to efficiently manage the filer’s assets and distribute the proper compensation to the relevant creditors.
What Can Be Lost?
Many people who decide to file for bankruptcy are quite often scared of losing all their valuable possessions. In reality, most people end up keeping most or all of their property. However, this is not always the case. When the person filing has to give things up, the case is an asset case.
Asset vs. No-Asset
It would be the preference of the filer that you are able to file a no-asset case in your Chapter 7 liquidation. However, this can only occur if your exempt property is worth under a specific dollar amount determined by bankruptcy law.
One example would be if you owned a classical violin worth $4,000, and the state exempts up to $5,000 for musical instruments, you would get to keep it, and it would not be taken from you. If it is determined that all your available bankruptcy exemptions would not lose you any property, you would file a no-asset Chapter 7 bankruptcy case.
However, if any of your property is worth more than the fixed amount for the exemption category, then you will be filing an asset case. An example of this would be if your home were worth more than the exemption total allotted. This is because you would most likely lose your home in Chapter 7 liquidation, and the bankruptcy trustee would take that money to pay off your mortgage, your lender, and you would receive whatever was leftover.
Where The Law Offices Of Mayer & Newton Can Assist You
Filing for Chapter 7 liquidation is incredibly stressful, and it brings about a lot of fear and uncertainty. Nobody wants to lose any of their belongings, and our team here at wants to help you make sure that does not happen. If you fear you may lose any of your property--we want to help.
Talk to our qualified team of lawyers today at to schedule your free consultation.