What is Chapter 7 Bankruptcy?
Augusta Georgia Chapter 7 Lawyer
Chapter 7 bankruptcy clears all of a debtor’s debts, often within just a few months. In Chapter 7, a court-appointed trustee takes stock of all of the debtors assets and debts and then sells everything at the best price possible. This is known as liquidation.
The money from the sales is used to pay as much of the debts as possible. The remaining debts are discharged at the end of the process, leaving the debtor free of any obligation to pay them. Certain property and assets are protected in specific cases. These are called exempt assets.
In Chapter 7 cases, there often isn’t much non-exempt property to sell. That type of case is known as a no-asset case.
Chapter 7 bankruptcies are known as Liquidation cases, after the name of the federal statute.
Are there other types of bankruptcy?
Yes, there are several types of bankruptcy. Chapter 7 and Chapter 13 are the types used by individuals. Chapter 11 is for companies that need to reorganize. There are also chapters for railroads, farms and local governments.