Filing for Chapter 7 Bankruptcy in Bethel, CT
What is Chapter 7 Bankruptcy?
Across the entire United States, including here in Connecticut and the New York region, Chapter 7 Bankruptcy is the most common type of filed bankruptcy. When you file for Chapter 7 bankruptcy, most debt will be able to be removed, allowing for a fresh start for debtors. This bankruptcy does require the liquidation of the debtor’s assets. This often leads to a loss of property and a decreased credit score. Otherwise known and recognized as a “straight bankruptcy,” Chapter 7 bankruptcy involves the selling of debtor’s assets and allowing for creditors to take the payment. With this process complete, a debtor is released from their gathered debt. It can be difficult to know when to best file for bankruptcy, which is why we recommend all of our Bethel clients to discuss with our attorneys.
There are certain requirements when applying for a Chapter 7 bankruptcy. For relief to be given, our clients must have a company with a notable amount of debt or have a household size that does not match the median income for the state. There is a “mean test,” which can help you determine the level of your household gross income.
How Does Chapter 7 Work
Like most legal procedures, there is a set process when filing for a Chapter 7 bankruptcy. This process starts with an official petition for bankruptcy, which is then followed by a schedule, and then statement affairs. This process often requires four to six months for completion. For a timelier processing, individuals or businesses should file the petition to a court in the Bethel area. An Official Bankruptcy form will also be required, listing information such as:
- A list of all creditors and the amount and nature of their claims
- The source, amount and frequency of the debtor’s income
- A list of all the debtor’s property
- A detailed list of the debtor’s monthly living expense, food, clothing, shelter, utilities, taxes, transportation, medicine, etc
To guarantee a smoother process, it is more beneficial when the debtor cooperates with the trustee and attorneys, providing the required documents and information. As a result, debtors will be released of personal liabilities.
The Chapter 7 Discharge in Bethel, CT
With the process concluded, the debtor will receive a discharge from court order. In laymen terms, the debtor has now been removed of gathered debt and is no longer expected to pay the debts off entirely. As mentioned, the Chapter 7 bankruptcy process will have the debtor liquidate assets to pay off creditors.