CHAPTER 7In a Chapter 7 Bankruptcy, you are required to surrender your ‘non-exempt' property to the control of a bankruptcy trustee. What constitutes ‘exempt' versus ‘non-exempt' property is largely determined by state and federal law. While in some circumstances, you may have to part ways with some of your possessions, successful discharge from Chapter 7 could leave you debt free (with the exception of certain debts like student loans, domestic support obligations, and certain tax obligations which cannot be discharged). In a majority of cases, available exemptions cover all of a debtor's property and nothing has to be surrendered. However, you must be current, and stay current, on your payment to a secured creditor or they have the right to ask the court to allow them to foreclose or repossess the collateral. Most Chapter 7 proceedings take anywhere from 4 to 6 months from filing to discharge .
While BAPCPA has limited the number of individuals that can qualify for Chapter 7, you should contact our office if you have questions regarding your eligibility to file under Chapter 7.
Chapter 7 may also be filed for a business to essentially wind up its affairs. The Bankruptcy Court will appoint a Chapter 7 Trustee to liquidate assets to pay debts of the business.