Chapter 7 Bankruptcy
Chapter 7
Chapter 7 bankruptcy is referred to as “straight bankruptcy” or “liquidation bankruptcy.” You can eliminate most kinds of unsecured debt, including credit card debt, medical bills, unsecured personal loans such as personal lines of credit, and old taxes. The majority of bankruptcy cases filed are this type. You must be below median income for your state or pass the means test to qualify for Chapter 7 relief.
Chapter 7 relief is often used by those who have fallen behind on payments to unsecured creditors or are only making the minimum payments to their creditors, or those who are facing judgments, liens or garnishments.
As is the case in a Chapter 13 bankruptcy, some debts cannot be discharged in a Chapter 7, including, but not limited to, child support, alimony, and most student loans.
When your case is filed, a trustee is appointed to take over your property. You will be able to keep your personal items and real estate depending on the law of the State where you live and applicable federal laws.
You can receive a discharge from a from a Chapter 7 case filed once every eight years.