In the US, consumers who want to approach the court for a fresh start choose chapter 7 bankruptcy. The chapter includes the liquidation of some assets to pay off debts. When approaching a claim, the first step is to determine if the consumer is eligible for the chapter.
State-Approved Credit Counseling Programs
A state-approved credit counseling program prepares consumers for bankruptcy. It explains ways to manage debt in the future and start over after the bankruptcy is over. The court requires all claimants who want to file for bankruptcy to attend the program and obtain a certificate of completion.
Reviewing the Consumer’s Debts
The attorney reviews the consumer’s current debts. First, they calculate the exact overall debt. Each debt is reviewed to determine if it should be included in the bankruptcy claim. Some debts are discharged through bankruptcy. The attorney might recommend debt settlement offers for small debts. Any settlement offers aren’t included in the bankruptcy, but the attorney secures a contract with the creditor.
Appraising All Assets
The court appraises all assets owned by the consumer and determines what assets will be sold through bankruptcy. The consumer doesn’t have the option to choose the assets themselves. They are required to surrender all deeds and titles to the court. The court assigns a trustee who works with licensed appraisers to manage the process.
Starting the Liquidation Process
The trustee schedules auctions for selling non-exempt assets. Some quick sales are completed to complete the transactions at an accelerated rate. The trustee distributes the funds to creditors and settles debts. Confirmations of payment are managed and reported to the credit bureaus. Any exempted value that applies to the assets is returned to the consumer.
Reviewing How to Repair the Consumer’s Credit
In the US, consumers file for chapter 7 when they want to liquidate their assets. The process involves the sale of certain assets to generate proceeds needed to repay creditors. The trustee assigned by the court reviews assets and their appraised values. Next, they determine what process is more effective when selling the assets. Consumers who want more information about fresh start bankruptcy can contact an attorney right now.