What is a chapter 7 bankruptcy case and how does it work?
Generally speaking, Chapter 7 is the cleanest, easiest, quickest, and least expensive form of bankruptcy. In a chapter 7 case, Debtors surrender their nonexempt property, if any exists. The Chapter 7 trustee then converts the property to cash and pays the debtors’ creditors. Very, very few Chapter 7 cases involve the loss of property by a debtor.
A Chapter 7 bankruptcy case is a proceeding under Federal law in which the debtor seeks relief from creditor actions under Chapter 7 of the Bankruptcy Code. Bankruptcy law is Federal law, and Chapter 7 is that part of the Bankruptcy Code which deals with liquidation. In a Chapter 7 case, the debtor receives protection from creditors immediately upon filing the case. Chapter 7 debtors must turn their non-exempt property of any significant value over to a Trustee, who then converts the property to cash and pays the debtor’s creditors. In return, the debtor receives a Chapter 7 discharge which is permanent protection from collection of most debts.
Generally speaking, Chapter 7 is the cleanest, easiest, quickest, and least expensive form of bankruptcy. In a chapter 7 case, Debtors surrender their nonexempt property, if any exists. The Chapter 7 trustee then converts the property to cash and pays the debtors’ creditors. Very, very few Chapter 7 cases involve the loss of property by a debtor.
Related Questions
- I filed a Chapter 7 Bankruptcy case within the last 8 years, but again or still have debt I need help with. Can I file a Chapter 13?
- How do you remove recorded judgements after Chapter 7 bankruptcy case is discharged and closed?
- What is the difference between a Chapter 7 bankruptcy case and a Chapter 13 bankruptcy case?
