Chapter 7 Bankruptcy in Louisville

Learn about Chapter 7 bankruptcy from Denise Brown's Legal Direction.  Chapter 7 bankruptcy is also known as liquidation bankruptcy.  The debtor’s property is sold and the debtor is allowed to keep the exempt property while the non-exempt property is distributed accordingly to his/her creditors. 

According to the Bankruptcy Code, a trustee oversees the sale of each property and distributes the proceeds as necessary.  In some cases, the creditor will take a loss for the sale or may not reclaim anything on the debt.  Most people who file for Chapter 7 bankruptcy are individuals who are having personal financial issues.

In order to file for Chapter 7 Bankruptcy, the debtor must do the following:

• File a petition with the courts
• Provide a full list of personal assets
• Provide a full list of liabilities
• Provide proof of income
• Provide a list of expenditures
• Provide a current financial statement including tax returns
• Complete a credit counseling class
• A debt repayment plan

As part of the official bankruptcy forms, the following must also be provided:

• A listing of all creditors including the amount owed and the nature of the loan
• The source of the debtor’s income including amount and frequency of payments
• A full list of all of the debtor’s property
• A detailed list of monthly living expenses

If the debtor is married, then he/she will also need to provide all of the above information for his/her spouse as well even if the debtor is filing an individual bankruptcy petition.  The trustee will use the income of the family as a whole to evaluate the financial position of the entire household.

Once the petition has been completed, the debtor will be able to keep the exempt property.  The non-exempt property is then divided among the creditors as deemed by the trustee.  The debtor is then released from most of his/her debts.  The creditors are also unable to try to collect any further monies from the debtor or take any actions that would do so.

If you are thinking of  using Louisville personal bankruptcy and would like bankruptcy protection under Chapter 7, contact Denise Brown for legal advice at 502-587-0331, or submit the web form.