Significant Information about Ch-7-Bankruptcy Exemptions
If you file a ch-7-bankruptcy, it means that you do not have any capabilities to pay for your current debts. Some people think that it is quite alarming to file bankruptcy, but it is more of a problem if you continue to avoid bankruptcy and deal with lawsuits and other legal issues because you failed to pay your debts. You can eliminate these problems by filing a chapter 7 bankruptcy right away.
People try to avoid this because they think that filing ch-7-bankruptcy will remove all the assets that they currently have to pay for the creditors. There are laws and regulations governing these issues and these regulations are also made to provide benefits to the debtors. This is the time when ch 7 bankruptcy exemptions are very important. How can these exemptions help you with all your troubles?
Exemptions on Bankruptcy
Once you file a chapter 7 bankruptcy, all your assets will become the property of bankruptcy estate and a trustee will be appointed to deal with these assets. It does not mean that all your assets will be sold and paid to the creditors. Because of this reason, exemptions are made for the debtors. Exemptions are made to make sure that the life of the debtor will not be hard after they file bankruptcy. A part of your assets can be kept but it will be dependent on the exemptions and the value of your assets. The exempted asset will not be sold by the trustee and it will be yours to keep.
The Amount of Exemption
Every state has their own set of exemptions and there is also some exemptions set by the federal system. There are some states that require you to use the exemptions but some of them are actually letting you choose to use the federal system or the state exemption depending on your choice. Some states may offer you unlimited exemption but most of them have set their limits for the sake of the creditors as well.
Abandonment of Property
Trustees may also abandon a particular asset if the value is only slightly higher or it is lower on the exemption amount. This is because they won’t have any benefit for selling it since the creditors and the trustee will only take a part of the remaining money after being sold.
Ch-7-Bankruptcy Discharge – What are the Important Things that you need to Know?
Basically, debtors file ch-7-bankruptcy because they wanted to remove their debts. If you have to deal with a lot of debts, discharge on your debts will probably be one of the most important things that debtors wanted. You need to remember that filing a ch-7-bankruptcy will eliminate your debts but you have to know that there are debts that will not be included. There will be some debts that you can remove and some of them will not be eliminated.
What Do you Mean by Ch 7 Bankruptcy Discharge?
Basically, a discharge is known as the release of the debtor from their responsibilities to pay for their debts and personal liabilities. Once a ch-7-bankruptcy is filed and accepted by the court, the debtor will not be required to pay for these debts. Filing a chapter 7 bankruptcy means that you do not have the capability to pay for your debts and these debts will be removed by the court to make sure that you will have a fresh start.
Dischargeable Debts
There are dischargeable debts that will be removed if your chapter 7 bankruptcy is accepted. If you do not have extraordinary circumstances and you disclosed all the information and debts on your claims, there will surely be no problems with your filing. However, all the debts incurred after you file your chapter 7 bankruptcy, but before receiving the discharge will still be an exemption. If you filed a chapter 7 bankruptcy and you made debts after filing, you have to pay for these debts because they are not part of the debts that you declared after filing bankruptcy.
Debts that will not be Discharged
If you have a secured debt, you cannot prevent the creditors from repossessing the property. Basically, they have the right to get the property from you if you filed for a bankruptcy claim. All you financial obligations will not be eliminated like child support and more. These monetary supports will not be included on your claims so they still need to be paid. Actually, tax debts are not removable but it still depends on the situation. If you can provide enough proof that paying your tax debts will cause you financial troubles, the court will remove it.
Before you file a ch-7-bankruptcy, you need to know that there are some debts that will not be covered so you need to think first before you file a case.