What is Chapter 7 Liquidation?
Chapter 7 is designed for debtors in financial difficulties that do not have the ability to pay their existing debts. In a Chapter 7 case, a trustee secures the bankruptcy estate all your assets which the trustee may obtain under the applicable provisions of the Bankruptcy Code. You may claim certain property exempt under governing law. The trustee may then liquidate the non-exempt property as necessary and uses the proceeds to pay your creditors according to priorities of the Bankruptcy Code. The purpose of filing a Chapter 7 case is to obtain a discharge of your existing debts. If, however, you are found to have committed certain kinds of improper conduct descried in the Bankruptcy Code, your discharge may be denied by the Court, and the purpose for which you filed the bankruptcy petition will be defeated. Even if you receive a discharge, there are some debts that are not discharged. Therefore, you may still be responsible for such debts such as: • Most taxes; • Child Support and Ali
