Chapter 7 of the Bankruptcy Code in the United States governs the process of liquidation in the US. This chapter falls under the bankruptcy law. This law is concerned with the process of liquidating assets as opposed to reorganization which is handled under chapters 11 and 13. Most people within the United States who file as bankrupt usually do so under this chapter. Thus, when in need of a specialist in chapter 7 bankruptcy Hawaii is the best place to check out. Honolulu is home to some of the best experts in the field. The abbreviation C7 (chapter 7) will be used for the purpose of this paper.
There are two ways of filling for bankruptcy. One way is for businesses and the other one is for individuals. A business may file for liquidation out of its own accord when it unable to service a debt it owes to third parties. Similarly, creditors of the business may force it to file for bankruptcy in a federal court under C7.
Companies that file for C7 insolvency are required to halt their operation unless they are specifically instructed to continue by the C7 trustee. When C7 insolvency is filed, a trustee is appointed shortly to handle the case. The duty of a trustee is examining the financials of an organization under consideration. They liquidate assets of the business and pay creditors what was owed to them.
It is not obvious for liquidation to always cause employees to lose employment. In some cases, when liquidation is being done, whole divisions are sold to buyers without altering them. Thus, only management changes, but the employees and all other aspects remain the same, even contracts of employment.
When making payments, priority is give to investors who take the least risk. For instance, secured creditors are paid first because the credit they extend is often protected by collateral. Collateral may be in form of mortgage, vehicles, shares, or other shares. Fully secured creditors include mortgage lenders and collateralized bondholders and they cannot lose the sums owed to them even in the event of liquidation.
Individual citizens can also file for C7 liquidation. This right is extended to individuals who reside, own a business, or own property in the U. S. However, the right only extends to one if they have not had any similar filing declined within a period of the past 180 days. When C7 insolvency is applied, one may be allowed to keep certain property called exempt property.
Different states have different rules regarding the value of property that can be considered as exempt. Besides exempt property, all other assets owned by the individual are sold by the interim trustee and proceeds are distributed to creditors. Unsecured debts are legally discharged through C7 liquidation filing.
However, certain debts cannot be discharged even through C7 liquidation. Such debts include student loans, fines, court imposed restitution, spousal support, child support, income taxes, and property taxes. Once filed, C7 liquidation is maintained on the credit report of an individual for a period of ten years from the date it is filed.
There are two ways of filling for bankruptcy. One way is for businesses and the other one is for individuals. A business may file for liquidation out of its own accord when it unable to service a debt it owes to third parties. Similarly, creditors of the business may force it to file for bankruptcy in a federal court under C7.
Companies that file for C7 insolvency are required to halt their operation unless they are specifically instructed to continue by the C7 trustee. When C7 insolvency is filed, a trustee is appointed shortly to handle the case. The duty of a trustee is examining the financials of an organization under consideration. They liquidate assets of the business and pay creditors what was owed to them.
It is not obvious for liquidation to always cause employees to lose employment. In some cases, when liquidation is being done, whole divisions are sold to buyers without altering them. Thus, only management changes, but the employees and all other aspects remain the same, even contracts of employment.
When making payments, priority is give to investors who take the least risk. For instance, secured creditors are paid first because the credit they extend is often protected by collateral. Collateral may be in form of mortgage, vehicles, shares, or other shares. Fully secured creditors include mortgage lenders and collateralized bondholders and they cannot lose the sums owed to them even in the event of liquidation.
Individual citizens can also file for C7 liquidation. This right is extended to individuals who reside, own a business, or own property in the U. S. However, the right only extends to one if they have not had any similar filing declined within a period of the past 180 days. When C7 insolvency is applied, one may be allowed to keep certain property called exempt property.
Different states have different rules regarding the value of property that can be considered as exempt. Besides exempt property, all other assets owned by the individual are sold by the interim trustee and proceeds are distributed to creditors. Unsecured debts are legally discharged through C7 liquidation filing.
However, certain debts cannot be discharged even through C7 liquidation. Such debts include student loans, fines, court imposed restitution, spousal support, child support, income taxes, and property taxes. Once filed, C7 liquidation is maintained on the credit report of an individual for a period of ten years from the date it is filed.
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