What is a Chapter 7 bankruptcy and how does it work?
A chapter 7 bankruptcy eliminates most types of unsecured debt. Examples of unsecured debt are credit cards and medical bills. Individuals, married couples, corporations and partnerships can all file a Chapter 7 bankruptcy if eligible. There are limits on what debtors can own when they file a Chapter 7 bankruptcy. If your assets are above those limits, the trustee may sell the assets to pay your debts.
Chapter 7 is a liquidation bankruptcy meaning it can eliminate most types of unsecured debt. Examples of unsecured debt are credit cards and medical bills. Individuals, married couples, corporations and partnerships can all file a Chapter 7 bankruptcy if eligible. Many people think that you cannot file a chapter 7 bankruptcy any longer. This is NOT accurate and most people can still file a chapter 7 bankruptcy. The changes in the laws passed in 2005 did not have as much impact as anticipated and most still qualify for chapter 7 bankruptcy.
