What Is Chapter 7 Bankruptcy?


Do you own property in San Diego? Are you aware about the concept of filing for bankruptcies and foreclosures? First of all, let us take up the term, "bankruptcy." You have bought a property by taking a loan from a bank or from a lender. What happens when you can't make your loan payments on time? A notice will be sent to you reminding you to clear your pending payments. In case you fail to repay the amount within this period, the creditor will issue a foreclosure on your property.

Foreclosing of a property means that the borrower has to vacate the property and the control will go to the bank or the lender. They might sell it to reimburse the amount which was loaned to the borrower. You can stall the foreclosure proceedings by filing for bankruptcy. There are two types of bankruptcy known as chapter 7 and chapter 13. However, most people tend to opt for the chapter 7 bankruptcies.

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To file for Chapter 7 you have to keep these things in mind:

* You need to make a list of your assets and liabilities. You also need to keep a record of your creditors and their claims.

* You need to maintain a record of liabilities and income. This list will include your monthly expenses and also the source of income and its frequency.

* A list of executory contracts and the leases that have not expired till date. For example, it can be a lease on your apartment.

* Keeping your financial statements at hand is also equally important. This statement will include your annual income for the last 3 years, foreclosures, repossessions, and also the debts that are still pending.

* The court will ask for a copy of your recent tax returns.

Remember, if you owe a consumer debt or business debt, then you need to submit a certificate of credit counseling along with a plan for the debt repayment. This plan will be outlined by the credit counseling agency. After the petition is filed, a trustee (sometimes it is appointed by the law firm representing your case) will review all the assets that you own. If any asset turns out to be non-exempt it will be sold to recover some of the loan money and it will be paid to the creditor or bank. After a gap of a month, a meeting will be arranged where the court will review your case and rule accordingly.


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