Getting Know Bankruptcy by Chapter 7 Liquidation

For a person or business who fails to repay outstanding debts, bankruptcy is a legal solution. This is the way someone can have a new life with a new start in legal way. You don’t have to escape to other country if you have debt problem and frustrated with the repayment. The law provides three avenues for bankruptcy: liquidation, reorganizations and lowering debt covenant. The first avenue is regulated under Bankruptcy Law Chapter 7. This article will give brief information about liquidation.

Definition of Liquidation
In chapter 7 of Bankruptcy Law, the debtor should surrender almost all of his assets to repay his debt. Certain assets are not included in this liquidation process to protect the debtor minimum quality of life and to continue after liquidation. The assets such as real estate mortgage and security interest for car loans are protected. It means that the debtor could hold the ownership even though the rest of assets are not enough to pay his debt. The rest unpaid debt is simply forgiven or wiped out. This is what we called as a new start for the debtor. You need to ask for a good attorney to file for chapter 7 bankruptcy, for example baton rouge bankruptcy attorney.

What else the attorney can do for you?
To check if you are eligible for chapter 7, your bankruptcy lawyers baton rouge could advise you whether you need to take the Mean Test or exempted from the Mean Test because your income is below the state median income. The mean test is a check to your income that it is not higher than a specified portion of your debts. This is to protect abused of chapter 7 for someone who is not in a hardship in payment the debts.