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Chapter 7

Liquidation Bankruptcy

 

Chapter 7

Chapter 7 is a one-shot method of clearing unsecured debts and getting a fresh start. All debts are cleared in during a 341 meeting with a bankruptcy trustee and your bankruptcy attorney with no liability left for later payment. A trustee is appointed by the court, who assesses the assets of the debtor and lists them under exempted and non-exempted assets. The exempted properties are retained by the debtor, while the non-exempted properties are liquidated to clear the debt. The creditor must settle with whatever amount is gained by selling the non-exempted properties. The client before applying for Chapter 7 must realize that he /she may have to lose their asset/properties but in most cases the exemptions allow debtors to keep most of their belongings. Under Chapter 7, most of your non-exempt property is surrendered to a bankruptcy court trustee to liquidate and distribute among creditors. The property you may keep (exempt) includes a house, a car for each licensed driver in the household, all qualified retirement account, wedding rings and other items.