What is a Chapter 7?
Chapter 7 bankruptcy is a liquidation of your assets. You are entitled to certain exemptions that will protect your property up to a certain amount. Chapter 7 will only discharged your unsecured debt, such as medical bills, credit cards, collections, etc. Any secured debt, such as houses and cars, would still have to be paid in order to keep those items. In a chapter 7, you are telling the court that you can not afford to pay back your debts. Therefore, the trustee is entitled to take some of your property to pay your creditors. Certain taxes, child support, alimony, student loans, debt that you received through fraud, criminal fines, and if you caused injury or death by drunk driving or under the influence of a controlled substance will not be discharged.
What are the differences between a No Asset Chapter 7 and an Asset Chapter 7?
A No Asset Chapter 7 case means that the trustee has abandoned all assets and will not be taking any of your assets to sell to pay creditors. An Asset Chapter 7 case means that the trustee is holding open the case so that he/she may sell some of your assets. The trustee will usually set up an auction to sell your property. Remember: The trustee can only sell something over the exemption amount. Some of your assets are protected by the exemptions.
If you would like to learn more about filing a Chapter 7 Bankruptcy contact Colleen Brunson at Brunson Law LLC today.