Chapter 7 Bankruptcy

The most common form of bankruptcy for individuals is Chapter 7.  To qualify for a Chapter 7 bankruptcy, a debtor must pass the “means test” which analyzes your income and expenses to determine if you have any ability to pay creditors.  If you don’t, then you can proceed with a Chapter 7 and your nonexempt assets will be liquidated to repay your debts.  Once this is done, you will receive a discharge of all debts.  Keep in mind that a significant portion of your property can be exempted from the bankruptcy estate and that the U.S. Trustee (representing the interests of creditors) only cares about those assets with equity. So not all property will necessarily be taken from you and liquidated.  It is important that you consult with an attorney to maximize your exemptions.