What is a chapter 7 bankruptcy?

Many of the people that are in difficult financial situation think about bankruptcy and find out about Chapter 7 and Chapter 13 bankruptcy. Below we offer ten possible answers to a common question:”What is a chapter 7 bankruptcy?”

1. Chapter 7 bankruptcy, also called straight bankruptcy is a liquidation proceeding.

2. Chapter 7 is a way to wipe out all out your non secure debts

3. Chapter 7 is not a way to erase secure debts or debts like tax debt, child support or alimony

4. Chapter 7 is the fastest bankruptcy type. A person will get the discharge in around 4 months.

6. Chapter 7 is the bankruptcy type where you will loose all of the non exempt properties. These will be sold by the bankruptcy trustee in order to pay your creditors.

7. Chapter 7 bankruptcy is also called the “fresh start” because in the vast majority of cases the debtor has no assets that he would lose.

8. Chapter 7 main purposes to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her debts.

9. Chapter 7 is the most used type of bankruptcy (around 60% of the people that fill for bankruptcy will choose chapter7) because most of the debts are wipe out.

10. Chapter 7 is NOT something you can do every year. If you filled for bankruptcy in the last 8 years you cannot fill for Chapter 7 again.

These are some of the answers to the “What is a chapter 7 bankruptcy?” question. You can find out more about the chapter 7 bankruptcy by reading other articles published in our site.