What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is filed when a Debtor cannot afford to make a meaningful payback to Creditors. Most unsecured debts are discharged (wiped out). Secured debts, such as cars, houses, and furniture, can continued to be paid directly by the Debtor if he desires to keep the collateral. However, the Debtor’s property is not protected, meaning.

Creditor’s can repossess or foreclose on the property if they so desire. Furthermore, if there is significant equity in any Assets, then the Court can potentially sell the Asset and pay creditors with the profit.