Chapter 7 Bankruptcy: What Is It and How Does It Work? The Way Out of Debt Bondage!
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VOLKPOP.co – Hit by a never-ending cycle of debt? Feeling suffocated by mounting credit card bills and loans? Chapter 7 bankruptcy, also known as liquidation bankruptcy, may be a solution you can consider. This legal procedure, while drastic, offers individuals the opportunity to restart their finances with a clean slate.
This article will explore Chapter 7 bankruptcy, from its definition, how it works, advantages and disadvantages, to the parties involved in the process.
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Chapter 7 Bankruptcy
Chapter 7 bankruptcy is a type of bankruptcy that aims to liquidate non-exempt assets to pay off debts to creditors. Non-existent assets are property that is not protected by law and can be seized for debt repayment. Conversely, exempt assets are property that is protected by law and cannot be seized by the court in a bankruptcy proceeding.
In other words, when filing Chapter 7 bankruptcy, your non-existent assets will be sold by a court-appointed party (usually called a trustee) to pay off debts. Once the liquidation process is complete and debts to priority creditors are paid, the remaining debts will generally be discharged.
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