Chapter 7 Bankruptcy
Chapter 7 is what most people think of when they hear the word “bankruptcy.” It is a liquidation bankruptcy where everything you own is put into a “pot” called your bankruptcy estate. A trustee is appointed by the Court to oversee your bankruptcy estate and to liquidate the “pot” to provide funds to distribute to your creditors.
However, under state and federal law, not all of your assets are subject to liquidation by the trustee. For example, under Florida law, the trustee is not allowed to sell your home except under certain, very limited circumstances.
In exchange for subjecting your assets to this liquidation process, you get a discharge of your debts. This means you no longer have a legal obligation to pay those debts. However, not all debts are eligible for a bankruptcy discharge. Student loans, domestic support obligations and certain tax liabilities are just a few examples of debts that are not eligible for a Chapter 7 bankruptcy discharge.
While Chapter 7 can be a very useful tool in assisting you to get a fresh start financially, it is a highly technical area of law, and you should not file Chapter 7 without first consulting with an attorney experienced in filing Chapter 7 bankruptcies. Contact Us to see if Chapter 7 bankruptcy is right for your situation.