How are unsecured creditors dealt with in a chapter 7 bankruptcy case?
An unsecured creditor is a creditor without a valid lien or mortgage against property owned by the debtor. Since most chapter 7 cases do not involve the sale of assets by the trustee, most unsecured debt is simply discharged without being paid. In most cases, the filing of a chapter 7 case will allow you to wipe out all credit card debt, medical bills, personal loans, judgments, and some tax debt.
