Evaluating and Appraising the Assets
The bankruptcy laws in each state dictate how courts evaluate the assets and if consumers qualify for liquidation. The standard is the appraised value of the assets must be greater than the balance of the debts. However, if the consumer includes a limited amount of debt, the price of the assets exceeds the total.
The Meeting of the Creditors
Bankruptcy courts require a meeting of the creditors. The court appearance allows creditors to approve or deny the inclusion of their account into the bankruptcy. The judge has the final say over the accounts and might include the accounts even if the creditors deny the inclusion.
Meeting with the Trustee
Liquidation requires a court-appointed trustee who manages the sale of assets and pays the creditors. bankruptcy attorney near me turns over all their deeds and titles to the trustee. The trustee and the court select the assets sold through liquidation. Homestead exemptions apply to the consumer's primary home. Exemptions apply to the automobile the consumer uses to go to work, too. They sell the assets through direct sales and auctions.
Starting New Lines of Credit and Securing New Assets
The courts allow consumers to open new lines of credit and purchase new assets during liquidation. As soon as the court approves the case, all new assets are safe from liquidation. Chapter 7 doesn't limit how claimants use their income. The terms of the bankruptcy apply only to the assets listed in the claim only.
The Automatic Stay and Duration of the Case
The automatic stay for chapter 7 liquidation lasts up to six months. During the stay, creditors cannot file a legal claim against the consumer. The court informs the consumer about the duration of their automatic stay after they approve the claim.
In the US, chapter 7 bankruptcy is the liquidation process in which the court sells the claimant's assets and settles their debts. The court chooses the assets for the liquidation, and the consumer doesn't have any control over the process. Consumers who want more information about starting chapter 7 bankruptcy cases can contact an attorney in their area now.