The Chapter 7 Bankruptcy Law – the Pros and Cons
Author: Miodrag Trajkovic
It is better to realize as early as possible that going through a bankruptcy claim is not easy. People generally opt for it as their first remedy. You must know the bankruptcy laws well in order to decide.
The bankruptcy law has been crafted in a way to promote provisions that are a part of filling bankruptcy claims. It contains systematized laws that help the debtor to rid himself of any financial obligations that he has to undergo. The Chapter 7 bankruptcy law is in other words called straight bankruptcy. This law deals with the liquidation process. According to this, the one who is filing for bankruptcy has to surrender all his assets except those that are unaccredited or exempted to the lawyer or the trustee in bankruptcy.
The court must appoint a trustee in bankruptcy and he will be given charge of selling the assets or converting them into cash. Once the assets have been converted to cash the creditors are paid with these funds. Under the Chapter 7 bankruptcy law you are discharged from any obligation after a period of four months.
When can you apply the Chapter 7 bankruptcy law? It is applied when the debtor is left with no property to give up or lose. This is one of the most common bankruptcies that are filed in the United States by either individuals or business corporations. You could personally file bankruptcy by abiding with the Chapter 7 bankruptcy law or the court may impose it.
The Chapter 7 bankruptcy law will prompt a business man to sell all his assets and pay what he owes the creditors and finally close down his business. The procedures are very similar for individuals who have been forced to file under the Chapter 7 bankruptcy law, the only difference here is the individual will have no business to close down.
The advantages of filing a claim under the Chapter 7 bankruptcy law first and foremost are that any amount of debt may be cleared and as soon as you get out of the trouble you are in, you get a clean chit. The other advantage is that there is no particular amount of debt to qualify you for filing under the Chapter 7 bankruptcy law. As there is a protection that is granted by this law, the creditors cannot exert any authority over you. It is processed very quickly and you can be discharged from any debts in a short period, say in about four to six months.
The disadvantage of the Chapter 7 bankruptcy law is that you have to give up your whole property. Debts like taxes, child support, housing mortgages, students’ loans and car loans are not discharged under the Chapter 7 bankruptcy law. Along with you the co-signers will also be pulled in and asked to pay for your home loan. This law may be only availed once in every six years.
It becomes difficult to avail other loans because your credit rating gets damaged. Once you have filed for the Chapter 7 bankruptcy law, it cannot be withdrawn.
Tread cautiously if you are considering filing under the provisions that are based on the Chapter 7 bankruptcy law. All you need is to be protected and not end up with added problems.
Article Source: http://www.articlesbase.com/finance-articles/the-chapter-7-bankruptcy-law-the-pros-and-cons-385695.html
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Help with bankruptcy proof of claim papers?
I worked for this employer who recently filed for bankruptcy and I get these papers in the mail for proof of claim. It has my name imprinted under ” name of creditor” but it asks me to fill in other info like the amount I’m owed. I have no idea if they owe me anything, its been almost a year since I ‘ve worked there. I have two proof of claim letters. Should I just ignore it? Any advice will be appreciated.
I am confused about a letter I received regarding the bankruptcy of General Growth Properties?
I recently received a letter naming myself as a debtor to General Growth Properties, INC regarding their bankruptcy (Chapter 11 Case # 09-11977) and information on how I need to provide proof of my claim.
I did some googling and turn up information on the company but I have no idea what this letter is about; and there is no contact information on it. I have received a few of these letter over the last several months and I don’t know what to do? Any sound advice or information would be appreciated!
How do I claim my settlement money from bankruptcy case?
I received a letter from a 3rd party firm telling me I have a dividend from a bankruptcy settlement. I have the bankruptcy case no (95-01682) and the company, Pidgeon’s Home Furnishings. I don’t want to pay the 3rd party’s fees since I expect that I should be able to go directly and get the money just like the 3rd party company. Anyone know how to go about this?
I don’t know the attourney office.
Can a company that has filed bankruptcy, claim from vendors money paid for services provided to them?
I did some cabling jobs for this company, I received a letter from their attorney saying that I have to pay back like $16,000 to this company. IS THAT LEGAL? The company filed Chapter 11 bankruptcy. What can I do.
if you hit a fire truck and they make you pay $20000 can you claim for bankruptcy for that?
i was hit the fire truck because black ice and i went to the court plead guilty and the fire truck insurance billed me $20000 and i said $20.00 per month the only ammount i can pay and then after 3 years of pay ment i missed 3 payment and i got letter (writ of summons ) from the court my question is : can i file bankruptcy for that while i only collect an unemployment?
The reason you received this is because your former employer believes that it owes you money. You were listed as a creditor.
It is unknown how much you would receive if you did file a claim (sometimes it is only pennies on the dollar). But it is absolutely certain that you will NOT receive anything if you don’t file a claim.
So in general, it is always best to file a claim.
Think about wages, pension, vacation time, bonuses, 401(k) contributions, health insurance premiums, anything that your ex-employer might possibly have owed you (or withheld from your paychecks without applying it where it was supposed to go) when it filed bankruptcy.
If it owed you anything at all, file a claim.
If you ignore it, you won’t ever get another chance to try to get it back.
You need to contact a lawyer of your own.
The letter you are getting is saying the company didn’t have the right to pay you (hence they want the money back), which would make you yet another unsecured creditor hoping to get pennies on the dollar.
Chapter 11 gives a corporation relief to straighten their finances out without going out of business.
Here is a description of the company from Google Finance:
“General Growth Properties, Inc. is a self-administered and self-managed real estate investment trust (REIT). GGP is the owner or manager of over 200 regional shopping malls in 44 states and the owner of five master planned communities. The Company operates in two segments: Retail and Other, and Master Planned Communities. Retail and Other includes the operation, development and management of retail and other rental property, primarily shopping centers. Master Planned Communities includes the development and sale of land, primarily in large-scale, long-term community development projects in and around Columbia, Maryland; Summerlin, Nevada; Houston, Texas, and its one residential condominium project located in Natick (Boston), Massachusetts. On February 29, 2008, GGP acquired The Shoppes at The Palazzo in Las Vegas, Nevada. In April 2009, the Company filed for filed for Chapter 11 bankruptcy protection from its creditors.”
Does any of the above ring a bell? Have you had any dealings with this company? Employed at a mall owned by them? Do you live or did you live in one of their developments? Did you lease a retail storefront? Sell services to them?
If they owe you money, the proof of claim form is your chance to put it on record. If you can’t figure out why they owe you money, the bankruptcy court may have made a mistake in sending you the letters.
There is an outside chance this is some kind of a phishing scam – if you do fill out the form don’t put down any SS# info or anything else that is sensitive.
You will have to do a little digging. If you have the case number you can look it up on PACER (Public Access to Court Electronic Records) and find out what court it was filed in. Then contact the court and ask how to claim your funds.
So, let’s see. You apparently had a car, and still have a computer and internet access. How do you pay for all that?
Missing three measly $20 monthly payments is ridiculous. (Sorry, but true).
You can file for bankruptcy at any time you choose – but that doesn’t mean it will be approved though.
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PS: Filing for bankruptcy costs about $1,000 nowadays too . . .