Chapter 7 Bankruptcy

Chapter 7 bankruptcy protection allows debtors to get rid of most of their debts and start over with a clean slate. However, it also has its drawbacks, including the loss of property and a depressed consumer credit score. Chapter 7, also called "liquidation" or "straight bankruptcy," is the process by which a debtor's assets are sold, creditors receive payment, and you are then free from your debts. You must be eligible to file for bankruptcy, and the rules vary depending on the type of case you want to file. Bankruptcy laws changed significantly in 2005, making it harder to qualify for Chapter 7 relief. This section contains in-depth information about Chapter 7 bankruptcy, including eligibility under the "means" test, types of debts that cannot be discharged, and other tips to help you with the process.