Chapter 7 Bankruptcy

Chapter 7 bankruptcy is also known as liquidation. In a chapter 7 bankruptcy, a court appointed trustee collects the non-exempt property of the debtor, liquidates the assets for revenue, and then distributes the proceeds to the owed creditors. Chapter 7 bankruptcy is known for being cheap and quick, generally taking 120 days and costing only $200.00. In a chapter 7 bankruptcy, unsecured debt can be discharged. However, secured debt cannot be discharged, but can be exempted and retained if timely payments are made during the chapter 7 bankruptcy filing. Debts that cannot be discharged in a chapter 7 bankruptcy include but are not limited to: alimony and child support, certain taxes, government backed educational loans, debts resulting from injury or death by the debtor to another entity, and debts for criminal restitution orders.

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