Bankruptcy Online

Chapter 7 bankruptcy is the type for corporations, partnerships or sole proprietor that discharges most of the business’ debts. There will be an assigned bankruptcy trustee who will gather all the debtor’s non-exempt assets for selling. The proceeds will then be divided among the creditors under the provisions of the Bankruptcy Code. The debtor may be allowed to retain some of his exempt assets, again, based on the Bankruptcy code. The debtor is also required to attend compulsory credit counseling before filing for bankruptcy. Most unsecured debts (or debts that does not have any underlying assets or collaterals that the creditors may take from a debtor) are discharged under this type of bankruptcy.

First of all, certain conditions must be met in order to be eligible to this type. For instance, when the debtor have settled all his monthly obligations such as utilities, budget for food, clothing, rent or mortgage and is left with no or little income to pay his creditors, he may have a chance to file for bankruptcy under this type. The debtor may also hear about the means test when exploring the procedures on how to file bankruptcy under this type. The means test follows a formula which simply determines if he still has the capacity to pay minimal amount to his creditors. The goal of this test as well as the other procedures one need to go through under this type is to establish those who are really suitable to file for this type.

All of the information here is provided to give an overview on how to file bankruptcy as well as the types of bankruptcies available to us. It is always advisable to confer with a bankruptcy lawyer for professional counsel.