Chapter 7 of the Bankruptcy Code: What Happens Next to Bankruptcy? [mortgageprotectiontips.blogspot.com]
The mediation, which includes 18 parties, was mandated by a state law passed the wake of the bankruptcy case of the San Francisco Bay area city of Vallejo. Stockton bankruptcy likely to be costly mess
Wisconsin's bankruptcy alternative provides powerful, fast debt relief that also beats debt consolidation. Not only is it cheap and easy to do, but not one of my clients has had to go to court since I started filing these for people back in 1998! This video is a power-point review that answers most major questions about how this law works. I help people with this law all over the State of Wisconsin. Because I also help people file bankruptcy when this isn't a viable option for them, federal law says that I must state "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code."
mortgageprotectiontips.blogspot.com Wisconsin Chapter 128 beats bankruptcy!
When a business becomes incapable of paying its debts, the owner can file for bankruptcy to resolve the issue with the creditor. In some cases, the creditor forces the owner to file for bankruptcy. Chapter 7 of the US Bankruptcy Law enables creditors to recover their investments through specific legal measures. In this provision, the debtor sells the business to cover the debts. If insufficient, other property can be used to repay the balance.\
Chapter 7 is differentiated from Chapter 11 and 13 of the same code by its governed transaction. Chapter 11 and 13 cover the reconstruction of the business to improve the revenue and to produce funds for repayment, while Chapter 7 covers the liquidation of assets (the business in particular) to pay off the debt. Depending on the owner's preference and considering the possibility of reviving the business in the end, he may choose either category.
Nonetheless, Chapter 7 provides a faster and less strenuous solution.After filing for bankruptcy, a Chapter 7 Trustee is appointed by the United States Trustee to immediately inspect the business’s affairs to figure out the best solution for liquidation. Until sufficient funds are produced through liquidation, the trustee holds power over the assets covered by the liquidation. He is the one who sells the property and transfers the proceeds to the creditors. He executes any approved methodology in dividing the proceeds in case many creditors are involved.
Selling the company after a corporate bankruptcy to accumulate funds does not necessarily mean dissolving the business and terminating all employees from their jobs.
Rather, the business can be sold intact to another company. This means its operations will continue, except that the new leadership may make some changes in the protocols and policies being observed. Even the management system may not be affected depending on its effectiveness determined by the buyer. In case of collaterals, the trustee shall determine which and which not to sell.Filing bankruptcy does not affect the deal made between the business owner and a fully secured creditor. If the debt entails collateral, which has value that equals or exceeds the debt, the fully secured creditor is entitled to recover the collateral in full even if bankruptcy is filed for. However, they are not entitled for any proceeds from the liquidated property determined by the court.
In contrast to corporate bankruptcy, Chapter 7 may not cover all types of debt in a bankruptcy involving an individual. These types include property taxes, student loans, and child support. The individual must pay off these debts in a separate transaction other than the liquidation. The owner can have the remaining property liquidated in another way to cover for the balance.
Suggest Chapter 7 of the Bankruptcy Code: What Happens Next to Bankruptcy? IssuesQuestion by Tina W: Has the Bankrupcy Code made it too easy for debtors to avoid their obligations by filing for bankruptcy? What are the implications of the increased number of bankruptcy filings for future potential debtors who seek to obtain credit? Do you agree with the Bankruptcy code and why? Do you think people might try to take advantage of it or not? Best answer for Has the Bankrupcy Code made it too easy for debtors to avoid their obligations by filing for bankruptcy?:
Answer by STEPHANE O
I think you are mistaken, the bankruptcy laws got a lot tougher in late 2005.
Answer by SPIFIMAN1
The bankruptcy laws back in October of 2005 were tightened to the point that most people do not qualify for chapter 7 anymore and are forced into chapter 13 where they must repay anyway, so I really do not understand your question.
Answer by Lesley
The rise in filings is largely due to the tanking of the sub prime mortgage lending market. This was in the coming for at least two years and has come full circle this year. It is not too easy to avoid obligations. If someone wants to file a second time after a discharge, it is an 8 year wait between two chapter 7 cases. Additionally, Child Support, Maintenance, taxes and student loans are all non dischargeable. The impact it has on debtors trying to obtain credit is that immediately after the discharge it will be easier to get high interest credit cards because it will be 8 years before that person can file again so it gives the lenders more time to collect. I think the new law passed in 2005 didn't really add much to the bankruptcy code. It mostly just requires more work for attorneys and more documentation from debtors. It is nice that they want to decrease bankruptcy fraud, but they aren't targeting the right group of debtors with the current laws. Additionally the credit counselling and debtor education requirements aren't likely to help people because all they do is fulfill a formality. Some debtors want to take the courses, but others do it only because the bankruptcy won't go through otherwise. Part of the problem is that there are lenders that want to make it harder to get debts discharged (which the new law didn't really succeed in doing), but at the same time they want to lend to anyone and everyone whether they are a good risk or not. There are a lot of predatory lenders out there, and until that goes down, bankruptcy is necessary for those that are duped into borrowing large sums at high interest rates. While the new law was an attempt to make it harder for chapter 7, I have yet to encounter a client that couldn't file a chapter 7 for income reasons.
