A Chapter 7 case is known as a liquidation Chapter.
Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts.

The purpose of filing a Chapter 7 is to obtain a discharge of your existing debts. A discharge means you no longer have a legal obligation to pay the debt. The debt in essence is “wiped-out.” The creditor cannot contact you or sue you after you receive your discharge. A discharge can include the following types of debts: credit cards, medical bills, signature loans, payday loans, collection agency, overdrafts, and repossession of vehicles and homes.

There are certain debts that you will not receive a Chapter 7 discharge: secured debts that the debtor wants to keep (including your house note and vehicle note), some taxes, student loans, domestic support and property settlement obligations, most fines, penalties, forfeitures, and criminal restitution obligation. Debts that are not listed in your Chapter 7 case, debts for death or personal injury caused by operating a motor vehicle, vessel, or aircraft while intoxicated from alcohol or drugs. A bankruptcy court can determine that a debt is not discharged if a creditor can prove that a debt arose from fraud, breach of fiduciary duty, or theft, or from a willful and malicious injury. The attorney will review your list of debts to determine the eligibility of discharge.

Under Chapter 7, consumers have exemptions. The exemption laws typically allow you to keep your home, car, personal belongings, and retirement. The majority of cases that we see are known as a non-asset case which means that you will not lose any of your property. The attorney will review your list of property to determine the exemption laws.