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WHAT IS CHAPTER 7?
Chapter 7 is the bankruptcy provision most frequently used by individuals. It involves the complete liquidation of a debtor's property, with the proceeds used to pay off the debts. However, the debtor can retain certain property that is specifically "exempt" under his choice of Federal law or her State's law, such as tools of one's trade, limited equity in a car and house, and some personal effects.
If you use Chapter 7 you may lose your home (depending on your state) but it does enable you to get out from under the burden of debt more quickly. [url]http://bankruptcy-law.freeadvice.com/[/url]
Not dischargeable in Chapter 7 are recent taxes; family support; student loans ; drunk driving judgments; criminal fines or restitution; or debts incurred by fraud or intentional wrongdoing.
Everything else is dischargeable: loans, credit card debts, judgments, medical bills, old income taxes.
Remember, liens and mortgages survive the bankruptcy: the debtor personally has no further liability for the debt, but the lien (a charge on the asset that is the collateral) survives as an interest in the asset. In appropriate circumstances, liens can be avoided because they impair an exemption or because the lien doesn't really attach to any value in the collateral.
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03-03-2001, 09:01 AM
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