How does Chapter 7 liquidation work?
In a Chapter 7 case, the debtor must relinquish his or her nonexempt property to a bankruptcy trustee, who then converts the property into cash by selling it and pays the debtor’s creditors from the sale proceeds. In return, the debtor receives a Chapter 7 discharge of certain debts if he or she is eligible for such a discharge, pays the filing fee, completes a personal financial management course and obeys the court’s directives.
In a Chapter 7 case, the debtor must turn his or her nonexempt property over to a bankruptcy trustee, who then converts the property into cash by selling it and pays the debtor’s creditors from the sale proceeds. In return, the debtor receives a Chapter 7 discharge if he or she pays the filing fee, is eligible for such a discharge, and obeys the court’s directives.
