Chapter 7 Bankruptcy
Chapter 7 bankruptcy is a liquidation proceeding. The debtor turns over all non exempt
property to the bankruptcy trustee, who then converts it to cash for distribution to the
creditors. The debtor receives a discharge of all discharageable
debts.
To file a Chapter 7 bankruptcy:
You must reside or have a domicile, a place of business, or property in the United States
or a municipality. You must not have been granted a Chapter 7 discharge within the
last 6
years or completed a Chapter 13 plan. You must not have had a bankruptcy filing dismissed
for cause within the last 180 days. It must not be a "substantial abuse" of
Chapter 7 to grant the debtor relief.
Generally speaking, if after you pay the monthly expenses for necessities there is not
enough money to pay the remaining monthly debts, then granting a discharge would not be an
abuse of Chapter 7. It would not be fundamentally unfair to grant the debtor relief under
Chapter 7.
The most common reasons for consumer bankruptcy are:
Unemployment
Large medical expenses
Seriously over extended credit
Marital problems
Large unexpected expenses
Disclaimer:
This information deals with Chapter 7 consumer bankruptcy. Each state has
its own bankruptcy laws, so you need to check with your state for details. Information
dealing with Chapter 13 bankruptcy and consumer debt restructuring is not discussed in the
above FAQs. The information contained in the following FAQs is provided for general
information purposes only and is not intended to be a legal opinion nor legal advice nor
is it intended to be a complete discussion of all the issues related to the area of
Chapter 7 consumer bankruptcy. Every individual's factual situation is different and you
should seek independent legal advice regarding specific information
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Alternatives to Filing Bankruptcy
How to Avoid Foreclosure
Chapter 7 Bankruptcy
Bankruptcy and My Bills
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About the Process
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