What is a Chapter 7 bankruptcy?
Chapter 7 is the liquidation chapter of the Bankruptcy Code. Chapter 7 cases are commonly referred to as straight bankruptcy or liquidation cases, and may be filed by an individual, corporation, or a partnership. Under Chapter 7, a trustee is appointed to collect and sell all property that is not exempt and to use any proceeds to pay creditors. In the case of an individual, the debtor is allowed to claim certain property exempt. In exchange for this, the debtor gets a discharge, which means that the debtor does not have to pay certain types of debts. Corporations and partnerships do not receive discharges. Consequently, any individuals legally liable for the partnership`s or corporation`s debts will remain liable. Therefore, individual bankruptcies may be required as well as the corporation or partnership bankruptcy.
Additional Chapter 7 Personal Bankruptcy FAQs
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Q:
I want to know if I qualify for bankruptcy – what are the eligibility requirements?
A: Depending on the type of bankruptcy proceedings that you wish to file, there are different eligibility requirements that are set by federal law, and thus apply … More -
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What is a bankruptcy "means test?"
A: A "means test" in a bankruptcy proceeding is one of the factors used to determine whether an individual debtor is eligible to file for bankruptcy … More -
Q:
Can I file for bankruptcy every few years?
A: No. Once a discharge is granted, a debtor who filed under Chapter 7 or 11 is prohibited from filing for another 6 years. However, a debtor who filed under Chapter 7 … More -
Q:
What is a bankruptcy trustee and who is the United States trustee?
A: In all chapter 7, 12, 13 and in some chapter 11 cases, a case trustee is assigned. In chapter 7 cases they are called Panel Trustees. In chapter 12 and 13 cases they … More -
Q:
Will all of my debts be discharged in a Chapter 7 bankruptcy?
A: No. It depends upon the type of debt. Though bankruptcy filing does discharge most debts, there are certain debts which will not be removed. These debts … More -
Q:
Can't I just transfer my assets to a friend or a Living Trust before I file for bankruptcy?
A: These types of transfers may be considered fraudulent and your Chapter 7 trustee may be able recover the property within a year of filing. Factors will be … More -
Q:
If I file for Chapter 7 bankruptcy can I keep some of my property?
A: In general, Chapter 7 bankruptcy gives up all of your non-exempt property. Exempt property is property defined by state law which is not discharged from … More -
Q:
Will bankruptcy cause me to lose my safe deposit box?
A: Maybe. You are required to declare all of your assets when filing bankruptcy, including the contents of any safe deposit boxes that you own. If you are … More
Bankruptcy Sub-categories
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