There is no form of bankruptcy that generates as much controversy as the Chapter 7 form of bankruptcy. We will discuss some of the ramifications concerning Chapter 7 Huntington WV and perhaps clear the air concerning this issue. Beginning from scratch: what is bankruptcy and what is the legal basis of the same as per the laws of United States?
First, bankruptcy is a legal status upon which a person is held to be unable to discharge his financial obligations as and when they fall due. Now, emphasis must be placed on bankruptcy being “a legal status.” Many times, people shout at the rooftops “am bankrupt” while all they are saying is that they are broke. They can however be forgiven because the message is passed across all the same.
Bankruptcy is commenced though the filing of a petition. There are two major types of bankruptcy proceedings – voluntary and involuntary bankruptcy. Just to shed light on the same, the former refers to a petition filed by the debtor as against his own person while the latter connotes a petition instigated by the creditors. The end result is the same.
Well, be that as it may, for proper understanding of Chapter 7 it is impertinent to understand the genesis of these chapters. You have probably heard of Chapters 11, 12, 13, and even Chapter 15. Now, the law relating to bankruptcy is largely codified in the United States Bankruptcy Code. The Code is divided into Chapters which define the various modes of filing petitions.
Before we delve into Chapter 7, let us give an overview of the subsequent chapters. Generally, chapters 11 to 13 govern debtor rehabilitation arrangements. To put it more clearly, it allows income-receiving debtors to satisfy the stipulations of court-approved plans. Chapter 15 of the Code deals with cross-border insolvency. As the word would suggest, it governs situations of bankruptcy that extend beyond the jurisdiction of the US courts. That is however a topic for another day.
From the foregoing, what does Chapter 7 Huntington WV bankruptcy entail?
Chapter 7 bankruptcy is casually referred to as ‘straight bankruptcy.’ It is the most common form of bankruptcy – forming a huge bulk of the bankruptcy cases that have been and are being adjudicated by the courts. The process is simple. The debtor or creditor usually files a bankruptcy petition upon which the court analyses the facts of the case and makes a decision demanding liquidation of the assets of the debtor. In all honesty, Chapter 7 Huntington WV should always be a last resort. This is because it places on the debtor various limitations. First off, most -if not all – of the property of the debtor is placed under the hands of a trustee. Also, the debtor cannot obtain loans or mortgages. And we haven’t even delved into the long-term ramifications of this form of bankruptcy. Just to give a foretaste of what it’s like, the debtor faces the limitations of bankruptcy for a period of 10 years.
Chapter 7 bankruptcy has generated widespread debate on its merits and demerits in Huntington WV. This issue can however only be resolved on a case-to-case basis. Visit The Bankruptcy Law Center for further information.