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Chapter 7 - the most common type of bankruptcy code in the USA.

Within the United States of America there are six types of Bankruptcy that form the USA’s Bankruptcy Code. These six types are; Chapter 7, Chapter 9, Chapter 11, Chapter 12, Chapter 13 and Chapter 15 and out of these the most common type of bankruptcy code is Chapter 7.

Chapter 7 of the USA’s Bankruptcy Code allows individuals to discharge certain debts and offers debtors protection from creditor’s harassment. It has been estimated that as much as 65% of all USA consumer bankruptcy fillings are done via the Chapter 7 option of the USA’s Bankruptcy Code.

In Chapter 7 a debtor turns over their non-exempt property to a bankruptcy trustee who then liquidates the property and distributes the proceeds to the debtors unsecured creditors according to the priorities established in the code. Chapter 7 of the Bankruptcy Code is open to both individuals and corporations, if you do file for Chapter 7 Bankruptcy all your debts are wiped out with a few exceptions such as aspects that are classed as secured debt meaning you will not have to sell necessary property such as your house or car as by law these are considered key aspects to allow you to make a fresh start; however in order to keep aspects such as these you will have to be able to keep up with the payments on them.

If you are a USA corporation/business which is badly in debt and you are unable to service the debt or pay off your creditors then Chapter 7 of the USA’s Bankruptcy Code may be the right option for you. If a large company enters Chapter 7 bankruptcy, entire divisions of the company may be sold intact to other companies during the liquidation.

If you are hoping to opt for Chapter 7 of the USA’s Bankruptcy Code then it should be noted that you can only file for Chapter 7 Bankruptcy once in any six year period and you cannot file if you have had a previous bankruptcy case dismissed within the last 180 days.

If you successfully file for Chapter 7 of the USA’s Bankruptcy Code then three to six months later you will receive notice that your debts are discharged. Also any wages that you earn after the case is begun are beyond the reach of creditors who had claims on the date of filing.

Bankruptcy, no matter what Chapter you use, is not the only option open to you when you are in debt. If you are struggling with your personal finances or if you are having difficulty keeping your business afloat then Edge of Bankruptcy may be the answer that you are looking for. Here at Edge of Bankruptcy we are made up of English and American Business angels and venture capitalists. Our aim is to invest in your company to save your business and as a result you will have money released to you in order to deal with your debt.

At Edge of Bankruptcy we seek to provide a solution often where no one else will. If you would like more information about how Edge of Bankruptcy can help you then contact us today and speak to one of our expert advisors.

What is the Role of the Chapter 7 Trustee?
Chapter 7 Pre-Filing Requirements
What Happens to Property in a Chapter 7 Bankruptcy Case?
Is Chapter 7 Still Available To a Debtor?

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