What is Chapter 7 Bankruptcy Law?

Chapter 7 Bankruptcy Law is a set of laws that determine what happens to an individual’s debts if they can no longer pay them off in California. It allows for an individual’s assets to be used to repay creditors in order to reduce the amount of debt owed. The individual must meet certain criteria to qualify for Chapter 7 Bankruptcy Law. Individuals must first show that they are insolvent, meaning they cannot pay off their debts without selling their assets. They must also pass a means test to prove they will not be able to develop a repayment plan. Only after these two criteria have been met can an individual file for Chapter 7 bankruptcy. Once filed, the court then appoints a trustee to repay creditors using the assets the individual owns. The assets are then sold at auction and the proceeds are then used to repay creditors. Most unsecured debt is usually discharged in Chapter 7 bankruptcy. This means the individual is no longer responsible for the debt and it is wiped clean from their record. The individual, however, is still responsible for certain types of debt such as back taxes or student loans. Chapter 7 Bankruptcy Law is an important piece of legislation that allows individuals to get relief from overwhelming debt in California. It works to protect the assets of individuals and help them start fresh with a clean slate.

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What is Chapter 7 Bankruptcy Law?

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