What Is A Chapter 7 Bankruptcy?
A chapter 7 bankruptcy is a proceeding under the federal law where a person is released (discharged) from paying his or her debts by filing bankruptcy, the person keeps those assets that are exempt, they continue to pay on secured items they want to keep (house, car) and turn over all of their non-exempt assets over to the trustee-in-bankruptcy. Some types of debts, however, are not affected by bankruptcy. See 11. USC Section 523.
Chapter 7 is the Bankruptcy Code’s liquidation chapter. It is sometimes referred to as “straight bankruptcy”. A Chapter 7 trustee is appointed to take over your property. Any property of value will be sold or turned into money to pay your creditors. Depending on the law of the State in which you file, you may be able to keep some of your personal and real property. If you have the ability to repay your debts, after taking into account reasonable and necessary living expenses, you may not qualify for relief under this chapter. Q: What is a Chapter 13 bankruptcy? A: Chapter 13 is frequently referred to as the “wage earner” chapter. Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts of less than $269,250 and noncontingent, liquidated, secured debts of less than $807,750, or an individual with regular income and such individual’s spouse, except a stockbroker or a commodity broker, that owe, on the date of
Chapter 7 is the liquidation chapter of the bankruptcy code. Individuals may file Chapter 7 and receive a discharge of all of their debts. A trustee is appointed in Chapter 7 to investigate the financial affairs of the debtor and collect and sell property owned by the debtor, if any that is not exempt. Businesses that go out of business and liquidate also file under Chapter 7.
Chapter 7 Bankruptcy is he Bankruptcy Code’s liquidation chapter. It is sometimes referred to as “straight bankruptcy”. A Chapter 7 trustee is appointed to take over your property. Any property of value will be sold or turned into money to pay your creditors. Depending on the law of the State in which you file, you may be able to keep some of your personal and real property. If you have the ability to repay your debts, after taking into account reasonable and necessary living expenses, you may not qualify for relief under this chapter.
Chapter 7 cases are commonly referred to as straight bankruptcy or liquidation cases, and may be filed by an individual, corporation, or a partnership. A Chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in Chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. The Bankruptcy Code will allow the debtor to keep a certain amount of property called “exempt” property; however, potential debtors with valuable assets should realize that the filing of a petition under Chapter 7 may result in the loss of property.
