Today, we will discuss a Chapter that our legal team knows like the back of their hand: Chapter 7 Bankruptcy. Before diving into the specifics, let us tell you that bankruptcy is not the end of the world. It’s a tool – we’ll explain why shortly, but keep this in mind. Everything would not have been lost if I had to file for bankruptcy.

What is Chapter 7?

Chapter 7 Bankruptcy is a legal process that offers relief to individuals facing financial hardship. It’s like a reset button for your debts, wiping out obligations such as unpaid credit card bills, rent and utility payments, medical expenses, gym memberships, and some other types of debts.

One of the main benefits of this chapter is that those who file for it are not required to repay creditors. The bankruptcy discharge order issued at the end of the case erases qualifying debts, and once they are filed, creditors cannot collect them.

This is known as a Chapter 7 liquidation. Those filing this liquidation can keep essential items such as furniture, clothing, a modest car, home equity, and a qualifying retirement account. What gets “liquidated” is property considered luxury, such as recreational vehicles, boats, timeshares, expensive cars, or rental property.

Does Chapter 7 eliminate all types of debts?

The answer is no. Some debts like child support, taxes, student loan debts, and debts for personal injuries caused by a vehicle or property of the bankruptcy filer, among others, remain. They cannot be liquidated through Chapter 7.

For an in-depth analysis of your case, contacting a bankruptcy expert attorney would be best. Our professional team has years of experience; don’t hesitate to reach out to discuss your situation and decide the following steps to start changing your financial situation.