Chapter 7 Bankruptcy, sometimes called a straight bankruptcy, is a liquidation process. The debtor (the person filing for bankruptcy) is required to turn over any non-exempt assets, if any, to the bankruptcy trustee who then converts them to cash for distribution to creditors. In the vast majority of cases the debtor does not have any assets that they would have to give up to the bankruptcy trustee. After approximately four months, the debtor will receive a discharge of all dischargeable debts. A Chapter 7 Bankruptcy is generally a relatively quick and painless way to get a “fresh start” which allows the debtor to start a new financial life without the burdens of their debts.
One of the goals of filing a Bankruptcy is to give the debtor, who is hopelessly drowning in debt, a fresh start by wiping the slate clean and allowing the debtor to move on with life free of most of their financials burdens.
