Chapter 7 Bankruptcy is a property-based bankruptcy, which is sometimes called a “liquidation” bankruptcy. It is the most used chapter of bankruptcy and is usually over quickly, often within six months of filing your case.
You are typically only eligible for Chapter 7 if you cannot afford to repay your creditors based on your income. The law makes this determination through a “means test”, which compares your household income to the median income in your state for your household size. In Chapter 7 bankruptcy, you will keep all property that is “exempt” but “non-exempt” property can be taken from you and sold for the benefit of your creditors. You will typically get out of debt in Chapter 7 bankruptcy through a “discharge” but you may still owe certain “non-dischargeable” debts after bankruptcy such as student loans. If Wink & Wink represents you in Chapter 7 bankruptcy, we will work to make sure the process goes smoothly and help you minimize “non-exempt” property so that you lose little to no property at all.