Is a Chapter 7 (Straight Bankruptcy) right for the debtor?
In a bankruptcy case under Chapter 7, the debtor files a petition asking the court to discharge your debts. The basic idea in a chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for your giving up property, except for “exempt” property which the law allows you to keep. In most cases, all of your property will be exempt. But property which is not exempt is sold, with the money distributed to creditors. If you want to keep property like a home or a car and are behind on the payments on a mortgage or car loan, a chapter 7 case probably will not be the right choice for you.
In a bankruptcy case under Chapter 7, the debtor files a petition that requests the court to discharge his debts. The basic idea in a chapter 7 bankruptcy is to wipe out or to discharge your debts in exchange for your giving up property, except for “exempt” property which the law allows you to keep. In most cases, all of your property will be considered to be exempt. However, any property that is not considered to be exempt is eventually sold. If there is any monies raised after the sale, then these proceeds are then distributed to any creditors. If you want to keep property like a home or a car and are behind on the payments on a mortgage or car loan, then a chapter 7 case probably will not be the right choice for you. The reasons for this is because chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt 16. Is a chapter 13 bankruptcy (Reorganization) the right choice for the debtor? In a chapter 13 case you
