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What Is Bankruptcy Liquidation?

Bankruptcy liquidation also known as Chapteryou to state the source and amount of your
7 Bankruptcy is a legal process where most ifincome, monthly expenses, debts, and
not all of your debt can be eliminated. Itinformation about your assets. You need to
may take four up to six months and currentlyfile these forms along with the certificate
costs $299 to file. Bankruptcy liquidationof your credit counseling session with your
can  be  used  by individuals and businesses.local  bankruptcy  court.
However, it is not as simple as filing aOnce you have filed for bankruptcy
petition and the court grants the request. Inliquidation, a rule called automatic stay
bankruptcy liquidation, the debtor has totakes effect which can be very helpful in
give up certain properties to be sold orurgent situations. It temporary protects you
liquidated in order to pay off as much of thefrom lawsuits, wage garnishments, eviction,
debt as possible. The bankruptcy laws in yourforeclosure, and disconnection of utilities
state dictate what property can and cannot besupplies.
taken away from you. In general, properties
of necessity such as clothing, householdWhen you file your case, the court will
items, and tools you need for your professionappoint a trustee whose duty is to liquidate
are considered exempt. When you do not haveyour non-exempt assets and distribute payment
much property that can be liquidated yourto your creditors. A week or so after you
case will be classified as no asset and therehave filed you and the creditors you have
will be no payment distribution to yourlisted will be sent a notice informing you
creditors.about the creditors meeting. During this
meeting, you will be under oath while the
In order to be eligible, you should not havetrustee questions you about the information
received a chapter 7 bankruptcy dischargeyou have provided in your bankruptcy papers.
within the past 8 years or a chapter 13Usually, this meeting does not last more than
bankruptcy discharge within the past 6 years.10  minutes.
Your monthly income should be lower or
equivalent to the median income of yourThe last stage in the bankruptcy liquidation
state. You will be required to take a meansprocess is the discharge of debt. You must
test  to  determine  your  eligibility.take note that certain debts may not be
eliminated such as family or child support,
Before filing for bankruptcy liquidation, youstudent loans or tax debt. Once you have
will have to get credit counseling from anreceived bankruptcy discharge, you are free
agency that has received approval from thefrom any legal obligation to pay the
United States Trustee. Afterwards, you cancreditors of your discharged debt. The record
proceed with filling out all the necessaryof your filing will be on your credit report
bankruptcy forms, which will basically askfor the next 10 years.



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