WHAT IS CHAPTER 7 BANKRUPTCY?
Often called a straight bankruptcy, Chapter 7 is a liquidation proceeding. The debtor turns over all non-exempt property to a bankruptcy trustee. The trustee then converts it to cash and distributes this money to the creditors. It typically takes about four months and all debts are wiped out. Usually individuals filing for Chapter 7 do not have many assets to lose, so Chapter 7 offers a completely fresh start.
WHAT ARE THE REASONS SOMEONE WOULD FILE CHAPTER 7?
Unemployment, medical expenses and other unexpected large expenses are common reasons for Chapter 7. However, overextended credit and marital problems can lead to Chapter 7 as well if they are serious enough.