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When an individual files for Chapter 7 bankruptcy, there is a liquidation process where the individual's non-exempt assets, if any, are sold and distributed to creditors. The person who oversees the selling of those non-exempt assets and the distribution to creditors is the Chapter 7 bankruptcy trustee. A trustee distributes the assets via the priorities established in the U.S. Bankruptcy Code. The trustee also determines if there have been improper transfers of property or funds and if those transferred items can be recovered and sold to pay off creditors. He or she also has the ability to dismiss the case if evidence of fraud or perjury become apparent during the proceedings. In Chapter 13 bankruptcy proceedings, the trustee reviews the plan presented by the individual and collects and distributes the payments. Whether an individual is able to file for bankruptcy under Chapter 7 is determined by a means test, which was established in 2005 during code revisions. Often, Chapter 7 bankruptcies have no declared assets so creditors get no payment. Chapter 7 normally is the easiest and quickest form of bankruptcy filing and is available to individuals, couples, partnerships and corporations. If passing the mean tests and approved for Chapter 7 bankruptcy, the process begins by filling out forms detailing one's financial affairs and financial history. This is the most vital and time-intensive part of the Chapter 7 process. All debtors must be listed on the forms. The forms also must list assets, including property, any debts secured based on that property and the market value of that property. And know that it is not just land that is considered as “property.” Any possession – such as art or any collection of value – must be listed as property as well. The individual signs the forms listing all debts and assets, with the understanding that knowingly falsifying the document is grounds for perjury. The forms are then filed with the bankruptcy clerk in the respective federal court district in which the individual lives. After the case is filed, everything regarding the individual's financial situation is based on that day, not future income or any future financial issues. At that point, a stay is also issued, stopping creditors from any liquidation auctions in an effort to recapture funds. The bankruptcy court then appoints a trustee who informs all creditors of the bankruptcy filing. A first meeting of creditors is established at which time the individual must appear and answer questions under oath from the trustee regarding his or her financial situation. Creditors also have the right to ask questions during that meeting. After the meeting with creditors, the trustee takes control on any non-exempt assets and begins the sale process. With the proceeds of the sale, the trustee covers the administrative costs of the chapter 7 bankruptcy case and then distributes the funds to creditors based on the priorities in the U.S. Bankruptcy Code. The creditors and the trustee have up to 60 days from that initial meeting to challenge the individual's plan. Unless a challenge is filed, the individual's debt is discharged shortly after the 60-day period has expired. Chapter 7 bankruptcy in Brighton MI can be an extraordinarily stressful circumstance, but a good team of knowledgeable professionals can help filers through the process. Learn more here: http://www.michiganbankruptcylawcenters.com/.
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