Source: http://rjabankruptcy.com/articles/chapter7liquidation.html
Timestamp: 2019-04-23 21:58:45
Document Index: 578419169

Matched Legal Cases: ['§ 707', '§ 101', '§ 109', '§ 109', '§ 521', '§ 302', '§ 1930', '§ 343', '§ 704']

Chapter 7 Bankruptcy Liquidation Chapter 7 Bankruptcy Lawyer Attorney Houston Austin San Antonio
Texas Bankruptcy - Chapter 7 Liquidation Under the Bankruptcy Code
Bankruptcy under Chapter 7 of the Bankruptcy Code is often referred to as “liquidation bankruptcy”. Under Chapter 7, a Bankruptcy Court can relieve a debtor of the responsibility to pay most of his or her debts but still allow the debtor to keep much of his or her property. Chapter 7 Bankruptcy is most often used by individuals. Businesses may also file for Chapter 7 Bankruptcy but by doing so they must cease operations upon filing and can no longer conduct business. The Law Offices of R.J.Atkinson,LLC has assisted people and businesses in Houston, Austin, San Antonio, and Dallas to file Chapter 7 Bankruptcy and receive a Discharge in Bankruptcy. If you reside in Texas and are considering your options under Chapter 7 Bankruptcy contact us to see if Liquidation Under the Bankruptcy Code is an option for you.
Chapter 7 Bankruptcy is primarily about liquidating all of a debtor’s unsecured debts. A Chapter 7 Consumer Liquidation Bankruptcy can be utilized when the monthly payment on all personal overhead (rent/car payment/utilities/groceries) exceeds your take home income. Generally, you will keep your home and your car under the current state of the law. A Chapter 7 Bankruptcy's main purpose is to discharge most kinds of debts. Debts such as credit card debt, hospital bills, repossessed cars or deficiency judgments on foreclosures are typical debts that are dischargeable. When a Chapter 7 is complete, you no longer owe the debt.
The following is a more detailed overview of Liquidation under the Bankruptcy Code.
If the debtor's "current monthly income"(1) is more than the state median, the Bankruptcy Code requires application of a "bankruptcy means test" to determine whether the chapter 7 filing is presumptively abusive. Abuse is presumed if the debtor's aggregate current monthly income over 5 years, net of certain statutorily allowed expenses, is more than (i) $10,000, or (ii) 25% of the debtor's nonpriority unsecured debt, as long as that amount is at least $6,000. (2) The debtor may rebut a presumption of abuse only by a showing of special circumstances that justify additional expenses or adjustments of current monthly income. Unless the debtor overcomes the presumption of abuse, the case will generally be converted to chapter 13 (with the debtor's consent) or will be dismissed. 11 U.S.C. § 707(b)(1).
To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor may be an individual, a partnership, or a corporation or other business entity. 11 U.S.C. §§ 101(41), 109(b). Subject to the bankruptcy means test described above for individual debtors, relief is available under chapter 7 irrespective of the amount of the debtor's debts or whether the debtor is solvent or insolvent. An individual cannot file under chapter 7 or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 7 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.
A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. (3) In addition to the petition, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; and (4) a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007(b). Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began). 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a). Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors. (The Official Forms may be purchased at legal stationery stores or downloaded from the internet at www.uscourts.gov/bkforms/. They are not available from the court.)
If the debtor's income is less than 150% of the poverty level (as defined in the Bankruptcy Code), and the debtor is unable to pay the chapter 7 fees even in installments, the court may waive the requirement that the fees be paid. 28 U.S.C. § 1930(f). In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must provide the following information:
Between 20 and 40 days after the petition is filed, the case trustee (described below) will hold a meeting of creditors. If the U.S. trustee or bankruptcy administrator (5) schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the order for relief. Fed. R. Bankr. P. 2003(a). During this meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding the debtor's financial affairs and property. 11 U.S.C. § 343. If a husband and wife have filed a joint petition, they both must attend the creditors' meeting and answer questions. Within 10 days of the creditors' meeting, the U.S. trustee will report to the court whether the case should be presumed to be an abuse under the bankruptcy means test described in 11 U.S.C. § 704(b).
To determine whether a presumption of abuse arises, all individual debtors with primarily consumer debts who file a chapter 7 case must complete Official Bankruptcy Form B22A, entitled "Statement of Current Monthly Income and Means Test Calculation - For Use in Chapter 7." (The Official Forms may be purchased at legal stationery stores or downloaded from the internet at www.uscourts.gov/bkforms/. They are not available from the court.) return to text
Unsecured debts generally may be defined as those for which the extension of credit was based purely upon an evaluation by the creditor of the debtor's ability to pay, as opposed to secured debts, for which the extension of credit was based upon the creditor's right to seize collateral on default, in addition to the debtor's ability to pay. return to text
If you reside in Texas and have questions about filing for Chapter 7 Bankruptcy please contact The Law Offices of R.J.Atkinson,LLC at 800-436-9056 for a free initial consultation to discuss your legal options. With locations in Houston, San Antonio, Austin, and Dallas we are a Texas Debt Relief Agency and help people and businesses file for Bankruptcy under the Bankruptcy Code. Don’t lose everything.
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