Chapter 7 Consumer Bankruptcy

Chapter 7 is a liquidation bankruptcy. All debtor’s non-exempt assets are sold or otherwise liquidated to create a fund to pay creditors’ claims. In exchange, a debtors debts are discharged, meaning the legal duty to pay them is extinguished. See Exemptions section under Resources or at bottom right tab of home page. IN order to keep something that is subject to a lien, such as a vehicle with a car loan, the debtor must reaffirm the loan or pay the value of the item in order to keep it.