A Chapter 7 Bankruptcy is a liquidation of non-exempt assets. It is also referred to as a “straight bankruptcy” a “total bankruptcy” or a “fresh start bankruptcy”. Chapter 7 Bankruptcy offers individuals and couples a fresh start as they can completely eliminate most unsecured debt and no longer have to worry about debt collectors, law suits, levies or garnishments.
A Chapter 7 Bankruptcy is commenced with the filing of a Voluntary Petition in a United States Bankruptcy Court. The Petition is accompanied by Schedules and Statements that detail your current property, debts and recent financial transactions. Shortly after the bankruptcy is filed, it will be assigned to a Trustee. The Trustee’s job is to examine your Petition, Schedules and Statements and attempt to recover money or property for your creditors. You will meet with the Trustee at a hearing and he/she will verify that the information is your Petitions, Schedules and Statements are correct.
The idea of losing property to the Trustee can be quite scary. Luckily, the State of Missouri has laws that will protect most, and generally all of your property. The vast majority of Chapter 7 cases are called “no asset” cases. This simply means that there are no assets available for creditors and that the individual or couple filing Chapter 7 Bankruptcy is able to eliminate their debt without losing any property or paying any money to the Trustee.
Our next blog will discuss who qualifies for filing a Chapter 7 Bankruptcy.
For further information regarding Chapter 7 Bankruptcy call (314) 802-8328.