CHAPTER 7

This is what every one thinks of when they think “BANKRUPTCY”.

This is the classic liquidation – All non-exempt value in a property is given up or bought back from the Chapter 7 Trustee appointed in your case. But, since there are so many exemptions, this can be the classic “Screw em all – Keep it all” since the exemptions are more than the average person has anyway!!

You can still keep anything above the exemptions you want if you can make the payments and you pay the trustee the non-exempt net amount, after any costs of sale that would be incurred, that the trustee could get by selling the asset and paying the secured creditors for that asset in full.
To qualify you simply cannot have filed a Chapter 7 within the last eight years. (You could still file to stop a foreclosure, etc. but no discharge of unsecured debts.)

Chapter 7 is useful even for people who do not want to keep their home. It stops foreclosure and gives some free rent time to get organized, save money and move.

It also cuts off any liability for deficiency judgments after foreclosure. Whenever the loan is not a purchase money loan, lenders have recently been bidding less than the full amount due at the foreclosure sale and pursuing the borrowers after they have foreclosed and sold the house!

Chapter 7 is also the ultimate fresh start! Dump the debt and get on with your life. Why try to pay them something when they wanted it yesterday, and you will never pay them enough soon enough.

The thing most people don’t know is that Bankruptcies clean up your credit – after your discharge the credit reporting people have to wipe out all the negative and now discharged debt and the negative reporting about it.

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