Chapter 7 like other forms of bankruptcy has its own unique requirements, and these requirements must be fulfilled if a person is to be illegible for filing bankruptcy under Chapter 7. These are the circumstances in which the person will be considered ineligible for Chapter 7:
The word bankruptcy alone has a way of making people feel apprehensive and uneasy. Nobody ever thinks that they will one day find themselves in the position of filing for bankruptcy. Unfortunately, for many Americans, hard financial times leave them with no other choice than to file for what is known as Chapter 7 bankruptcy.
Chapter 7 bankruptcy is the most common form of bankruptcy in the United States. It is also referred to as liquidation bankruptcy. It allows debtors to lose all their debt and start over from scratch. Most of their assets are liquidated to pay off the creditors, and their credit score decreases. The creditors are paid off, and the filer can have a clean slate. In 2005, there were major changes made to the bankruptcy law to stop people from abusing it. After these changes, eligibility criteria to file for Chapter 7 bankruptcy became stricter.
When many people in California think about bankruptcy, they likely do so in a negative light. Some feel that the only reason to file for Chapter 7 bankruptcy is due to a lack of financial discipline. Others assume that bankruptcy represents some type of failure. Some even believe that bankruptcy is nothing more than an effort to shirk one's financial obligations. In reality, however, many highly successful people turn to personal bankruptcy to resolve complex financial matters.
Often, companies in California have many different employees who dedicate themselves to the company's success. Despite this dedication, there are often factors beyond the control of workers that can impact revenue. In some cases, a company may decide that the best option is to seek Chapter 7 bankruptcy protection.
People in California hold a number of misconceptions about personal bankruptcy. One of the most common is that individuals who file for Chapter 7 bankruptcy are demonstrably poor money managers, and they do not have what it takes to achieve any significant level of success. This is not only inaccurate, but such beliefs could keep people from seeking relief from crushing levels of debt.
When an individual's debt exceeds his or her ability to repay those obligations, it is time to take action. While some people are able to dig themselves out of debt, many others turn to Chapter 7 bankruptcy to eliminate debt and gain a fresh financial start. An example is found in the recent filing by actress Tisha Campbell and her husband of 20 years, both California residents.
Some California readers will recognize the name Patrice Washington. The 34-year-old woman is a personal finance expert, and she has written three books on how to deal with financial turmoil and find future success. What many people do not know is that Washington has had to dig herself out of financial difficulties twice in her life -- once with the help of a Chapter 7 bankruptcy filing.
Owning a business is difficult. Not only does it involve a great deal of hard work, but it also involves a great deal of capital. In many cases, circumstances beyond a business owner's control can have a major impact on the overall success of the operation. As a result, many businesses in California seek financial relief through Chapter 7 bankruptcy proceedings.