Filing for the chapter 7 of bankruptcy is a well-known way to get relief when you owe money to one or more creditors. This is because it enables to prevent the seizure and liquidation of your personal belongings, for example. Indeed, thanks to this legal option, you'll have the opportunity to rearrange your finances and come up with a plan to solve your debt issues. But, did you know that there is a legal course that your creditors may use to take possession of your assets despite your bankruptcy chapter 7 filing? If no, then please keep on reading this article.
Introducing the legal motion for relief in bankruptcy chapter 7
The motion for relief in bankruptcy chapter 7 is a legal course that cancels the benefits of a bankruptcy chapter 7 filing. It basically removes the relief that you will have obtained from your creditors' attempts to take possession of your assets, and sell them to recover their owed money.
When can this legal motion be filed?
The motion for relief in bankruptcy chapter 7 can only be filed by a creditor who has a valid reason to accelerate the collection process, and thus the recovery of their debt. As you might know, bankruptcy chapter 7 cases are lengthy procedures that consist of not only listing and liquidating the different assets of the debtor, but also redistributing the proceeds among the creditors.
This means that if the debtor purchased a product whose value quickly depreciates, the creditor might not be able to recover its full value by the time the bankruptcy chapter has run its course. To make sure that their interests are protected, certain creditors don't hesitate to submit this legal motion as soon as their debtor files for bankruptcy. Examples of creditors that typically use this motion include:
- Mortgage firms
- Auto dealerships
When examining the motion for relief in bankruptcy chapter 7, the trustee will want to see the evidence that the collateral included in the contract may not be enough to provide satisfactory payments to the creditor. And because the role of the trustee is to make sure that each party is treated fairly, there's a high probability that the motion will be granted.
It's important to be aware that creditors still have the option to resume collection efforts even after you've filed for bankruptcy chapter 7, but keep in mind that this isn't the end, since a knowledgeable attorney will be able to help you protect your assets even against such a turn of events. (For more information, contact Julie A Philipi Attorney at Law or another company)Share