In these challenging economic times, a lot of families and individuals are finding life difficult trying to make ends meet. There are some solutions, like working for a limited time or using credit cards in paying one's bills. Soon credit cards, medical bills, and other unsecured debts can become overwhelming, leaving people wondering where to run. Houston attorneys represent their clients in issues regarding Chapter 7 bankruptcy proceedings. The management of a company in bankruptcy is very vital. Therefore, understanding what chapter 7 means in the bankruptcy of a company will help a company. 

How Does It Work?

Under this bankruptcy, nonexempt personal assets, asset liquidation is liquidated to help in paying creditors. Nevertheless, most assets such as retirement funds, furnishings, vehicles, and home equity are exempted for people not to lose their personal properties. There is basically two type of debts such as unsecured and secured debt. Generally, a secured debt is one that is incurred to buy a particular collateral, which the creditor holds an interest in, and can foreclose or repossess. An instance of secure debt is your appliances, furniture, and vehicle. Nevertheless, you have the opportunity of surrendering secured collateral and discharging any potential deficiency if you consider it to be in your best interest. Unsecured debt, on the other hand, includes medical bills, judgments, personal loans and credit card debts. Chapter 7 provide you the opportunity of discharging your unsecured debts.

Besides this, it also helps you in exempting certain assets such as retirement accounts, cars, and houses. It affords you the privilege of starting from the beginning without having the burden of paying bills.

In managing human resources in company resources regarding chapter 7, there are certain requirements that must be considered before one can qualify. There is a meaningful test, which is used in determining if they have the ability or means of paying their creditors. If you are filing for chapter 7 as an individual, such person must qualify under the means test. Aside from this, the income of such person is calculated starting from the six months leading to the time the filling. As a company, you need the services of an experienced attorney to help in guiding you through this process. Chapter 7 is one of the good tools when it comes to dealing with company debt is because if the filer has over 50 people on non-consumer business, they don’t need the means test to qualify.

For instance, if a debtor doesn’t fulfill the requirement for Chapter 7, there is still the possibility of filing for Chapter 13, which set up a debt payment program founded on expenses, income, and assets. For companies that qualify for Chapter 7 may find some benefit in filing for Chapter 13. Ensure you discuss this will your lawyer.