Is Chapter 7 Bankruptcy An Option For You?
The main business and commerce related laws in the United States are laid down under the United States Code. Chapter 7 Bankruptcy is discussed in the Chapter 7 of Title 11 of the same code. For most of the people who want to be declared bankrupt, this is the main set of regulations. The process according to which these laws are implemented in the actual proceedings is well laid out in it. Post 2005, the regulations went serious overhauling because of the introduction of new Act for this purpose.
The new laws make it mandatory that in order to be declared bankrupt, the person or organization who files for bankruptcy undergoes a means test. In this test a thorough evaluation is conducted over all the sources of income as well as the avenues of expenditure of the subject. The test takes care of all the expenses which are a must. They are counted on a day to day basis but get accounted for on a monthly basis because generally income sources are considered to be monthly.
In order to be able to file for Chapter 7 bankruptcy, it is a must that the calculations done must render an output that is lower than the median income of that state. Where the output is found to be above the median income of that state, the subject would not be allowed to file for a Chapter 7 bankruptcy regardless he is in Tennessee or Tampa or any other part of the United States. For the cases with higher income, the Chapter 13 bankruptcy laws come into the picture.
Following this, the individual or organization which files for bankruptcy would be required to undergo credit counseling. This is a mandatory procedure and can not be skipped. In this part a thorough analysis of the financial situation of the person or business which has filed for bankruptcy is performed. A specialized agency is deployed to perform this analysis. During the credit counseling, the counseling agency, would look for the ways that can be harnessed to get the finances of the entity filing for bankruptcy on a proper track. In case a way is found using which the condition can be brought under control and avoiding bankruptcy is possible, the proceedings for Chapter 7 bankruptcy would be halted and the steps would be initiated to declare a Chapter 13 bankruptcy. You must also be aware process of a Chapter 7 bankruptcy requires that you should file for the declaration in the jurisdiction where you reside. For the cases where a business is filing for bankruptcy, the requirement is that declaration should be filed for in the jurisdiction of the location of business. Chapter 7 bankruptcy might be a bitter pill but sometimes the patient needs it and in almost all cases, it works too.
Privacy Policy
|