The Law Office of Kim Covington Kim Covington Bankruptcy Lawyer Kim Covington Bankruptcy Lawyer

How does Chapter 7 liquidation work?

If you are dealing with financial issues in Oregon, you may have considered filing for Chapter 7 bankruptcy. According to the Internal Revenue Service, this is a debt relief option that is meant to aid those who cannot pay down their debts through regular monthly payments. In order to receive this type of protection, however, you may be required to liquidate certain assets.

Upon its commencement, a bankruptcy trustee will be appointed to your case by the court. Among other duties, your trustee is charged with handling your Chapter 7 liquidation. In doing this, according to the U.S. Courts, he or she is responsible for maximizing the returns to your unsecured creditors. The assets that may be subject to liquidation include vacation or second homes, second vehicles, art collections, cash, stocks and bonds, and other investments.Typically, a portion of equity in your home and motor vehicles up to a certain value are protected from liquidation. So too are reasonably necessary clothing items, household furnishings and goods, and household appliances.

After your Chapter 7 bankruptcy filing, you may be ordered to turn over your non-exempt assets to your trustee. He or she will then sell this property. This may include luxury items that are free and clear of liens, or that are worth more than the liens or security interest that are attached to them. Once your assets have been liquidated, your bankruptcy trustee will apply the returns toward your unsecured debts.

This post has provided an overview of the Chapter 7 bankruptcy liquidation process. However, you should keep in mind that each case is unique. Therefore, you should take this post only as general information and not as legal advice.

No Comments

Leave a comment
Comment Information

Office Locations

The Law Office of Kim Covington

Eugene Office
1445 Willamette Street, Suite 9
Eugene, OR 97401

Map & Directions

Albany Office
1135 Dale Street SE, Suite #B
Albany, OR 97321

Map & Directions

Roseburg Office
1701 West Harvard, Suite 201
Roseburg, OR 97470

Map & Directions

Phone: 541-393-2790
Toll Free: 800-673-1891
Fax: 541-344-6466