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Chapter 7
 Chapter 7: $0 down to open a file.
Installment payment options available for
Bankruptcy fees.
WHAT IS CHAPTER 7?
Chapter 7, entitled Liquidation, contemplates an
orderly, court-supervised procedure by which a
trustee collects the assets of the debtor's
estate, reduces them to cash, and makes
distributions to creditors, subject to the
debtor's right to retain certain exempt property
and the rights of secured creditors. Because
there is usually little or no nonexempt property
in most chapter 7 cases, there may not be an
actual liquidation of the debtor's assets. These
cases are called "no-asset cases." A
creditor holding an unsecured claim will get a
distribution from the bankruptcy estate only if
the case is an asset case and the creditor files
a proof of claim with the bankruptcy court. In
most chapter 7 cases, the debtor receives a
discharge that releases the debtor from personal
liability for certain dischargeable debts. The
debtor normally receives a discharge just a few
months after the petition is filed.
HOW DOES BANKRUPTCY HELP?
From an individual debtor's standpoint, one of
the primary goals of filing a bankruptcy case is
to obtain relief from burdensome debt. Relief is
attained through the bankruptcy discharge, the
purpose of which is to provide a "fresh
start" to the honest debtor.
WHAT IS A DISCHARGE IN BANKRUPTCY?
Under the federal bankruptcy statute, a
discharge is a release of the debtor from
personal liability for certain specified types
of debts. In other words, the debtor is no
longer required by law to pay any debts that are
discharged. The discharge operates as a
permanent order directed to the creditors of the
debtor that they refrain from taking any form of
collection action on discharged debts, including
legal action and communications with the debtor,
such as telephone calls, letters, and personal
contacts.
Although a debtor is relieved of personal
liability for all debts that are discharged, a
valid lien (i.e., a charge upon specific
property to secure payment of a debt) that has
not been avoided (i.e., made unenforceable) in
the bankruptcy case will remain after the
bankruptcy case. Therefore, a secured creditor
may enforce the lien to recover the property
secured by the lien.
 Our
Bankruptcy FAQ
contains much more information concerning
Chapter 13 and Chapter 7 bankruptcies.
We suggest that you review the information
on this website to get a clear understanding
of your rights and remedies and whether
filing chapter 7 or chapter 13 makes sense
for you.
Remember: if you have ANY questions, please do not
hesitate to call us for a free consultation
at (865) 281-8084.
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