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One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a "fresh start." The debtor has no liability for discharged debts. In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. 11 U.S.C. § 727 (a) (1).
Bankruptcy Basics provides basic information to debtors, creditors, court personnel, the media, and the general public on different aspects of federal bankruptcy law.
Chapter 13 is often preferable to chapter 7 because it enables the debtor to keep a valuable asset, such as a house, and because it allows the debtor to propose a "plan" to repay creditors over time – usually three to five years.
A debtor will remain a debtor in possession until the debtor's plan of reorganization is confirmed, the debtor's case is dismissed or converted to chapter 7, or a chapter 11 trustee is appointed. The appointment or election of a trustee occurs only in a small number of cases.
A chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.
Individuals can file bankruptcy without an attorney, which is called filing pro se. However, seeking the advice of a qualified attorney is strongly recommended because bankruptcy has long-term financial and legal outcomes. Filing personal bankruptcy under Chapter 7 or Chapter 13 takes careful preparation and understanding of legal issues.
Bankruptcy is a set of federal laws and rules that can help individuals who owe more debt than they can pay. Bankruptcy laws help people who can no longer pay their creditors get a fresh start by liquidating their assets to pay their debts or by creating a repayment plan.
Notice of Chapter 7 Bankruptcy Case – No Proof of Claim Deadline Set (For Corporations or Partnerships) Meeting of Creditors Notices B 309D
Documents Required for Chapter 7 Filings: Voluntary Petition (Official Form 101 for individuals or Form 201 for non-individuals: including attorney’s signature, if applicable, and a completed Part 5 for individual debtors)
A Chapter 7 bankruptcy, often referred to as "liquidation", contemplates an orderly, court-supervised procedure by which a trustee takes over the assets of the debtor's estate, reduces them to cash, and makes distributions to creditors, subject to the debtor's right to retain certain exempt property and the rights of secured creditors.