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| What is Chapter 7? |
Chapter 7 is a relatively inexpensive and brief legal proceeding, the purpose of which is to eliminate most debts, and provide the "Debtor," a "fresh start." The
case begins by filing the bankruptcy petition. Schedules attached to the petition must fully disclose information regarding the Debtor's assets, debts, income and expenses. The Debtor must appear for one hearing, referred to as the "meeting of
creditors." This hearing is conducted by the Bankruptcy Trustee, about a month after the case is filed. Many of the Debtor's assets are protected by exemption laws. The Debtor will be released from most debts, assuming there has been proper notice
given to the creditor. Some debts, such as recent tax liabilities, child support or alimony obligations, and government insured student loans, and criminal fines or penalties, are not dischargeable in bankruptcy. The majority of consumer Chapter 7
cases are uncontested, and conclude with the Court issuing an order of discharge. The discharge order is a permanent and final injunction against creditors. A Chapter 7 discharge for the individual is available not more than once every six years, under
the current law. |
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