In this issue of Community Banker we discuss the simplest and most common for of bankruptcy.
The November/December issue of the Community Bankers’ Advisor provided lenders a general overview of the bankruptcy process. This issue summarizes Chapter 7 bankruptcy, the simplest and most common form.
In a Chapter 7 case, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of those assets to pay creditors; priority is given to those creditors with valid liens. In addition, the debtor may keep certain “exempt” property. Most debts are discharged in a Chapter 7 (most but not all – there’s no discharge for student loans, child-support payments, unpaid taxes, etc.).
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The Community Banker is prepared by attorneys at Olson & Burns P.C. to provide information pertaining to legal developments affecting the field of banking. In order to accomplish this objective, we welcome any comments our readers have regarding the content and format of this publication. Please address your comments to firstname.lastname@example.org.