Chapter 7 Bankruptcy Laws

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Chapter 7 bankruptcy laws exist for those who wish to file bankruptcy; if the borrower has accrued more debt than he can possibly pay, then he can take advantage of Chapter 7 bankruptcy laws and file a petition. Filing Chapter 7 means that the creditors must stop trying to collect the debt that is owed unless it is associated with the necessary lien, and some of the debtor's things will be kept by the trustee as a security for the payment. Credit card debts and medical bills are the two major reasons people file for a Chapter 7 bankruptcy case.

Once the debtor has filed bankruptcy under Chapter 7 laws, they will be given a case number, and an injunction will then be passed to cease creditors from collecting. In an automatic stay like this, a trustee will be appointed to the case by the administrative trustee's office after thirty days. The trustee will have to auction off all of the debtor's property in an attempt to raise the amount of money that will be the priority and given to the creditors. The trustee is responsible for deciding if the debtor is really liable or not, and the trustee must also report any fraudulent activities of the debtor, as well as keeping records concerning the debtor.

A lawyer will also be deciding the value of property that may be kept as lien to help with exemption of a particular amount; the lawyer can also advise you as to which properties should be under a trustee in order to make an appropriate lien amount. Within sixty days of the trustee and debtor deciding the fate of the debtor's assets, the creditors may file a complaint. If the debtor has any objections, the trustee must file them within thirty days of the trustee-debtor meeting having taken place. A trial may be the next step if a creditor also has objections; in such a case it is wise to seek the advice of sound legal counsel.

Generally speaking Chapter 7 bankruptcy law trials get discharged without such un-pleasantries, but specific debts will be more complicated and require legal advice; an attorney should be consulted concerning which sort of debt may create more problems for the debtor.

President Bush passed a new bankruptcy bill that may possibly create some very noticeable differences in the Chapter 7 bankruptcy laws because this bill has made it more difficult for debtor's to file Chapter 7 bankruptcy for many different kinds of debts. The federal court will determine whether each bankruptcy case is to be filed under Chapter 7 bankruptcy laws, or if it should fall under some other bankruptcy chapter. So if you're wondering "should I file for bankruptcy?" you might want to take that into consideration.

I hope this article has answered your questions concerning Chapter 7 bankruptcy laws, but if you still need more chapter 7 bankruptcy information or perhaps you're looking for a chapter 7 bankruptcy lawyer, search around the Internet a bit more.