Chapter 7 bankruptcy—also known as “liquidation bankruptcy”—is designed to help individuals and some businesses eliminate overwhelming debt and get a fresh financial start. It’s typically used by people who don’t have the means to repay their creditors.
When you file for Chapter 7, a court-appointed trustee will review your assets. In most cases, you can keep essential property like your home, car, and personal belongings, while non-exempt assets (if any) may be sold to pay creditors. Many people who file under Chapter 7 don’t lose any property at all.
Once the process is complete, most unsecured debts (like credit card balances, medical bills, and personal loans) are completely wiped out.
Chapter 7 is a powerful tool for those facing job loss, medical debt, or other financial hardship, and it provides legal protection from creditor harassment, lawsuits, wage garnishment, and repossessions as soon as you file.
Can I file for Chapter 7 Bankruptcy?
Both individuals and businesses can file for Chapter 7 bankruptcy, but it’s important to understand that this process typically moves faster than Chapter 13. Most cases are completed within three to five months, with the timeline largely depending on how quickly non-exempt assets can be liquidated. Because of this, careful planning around the timing of your filing and your ability to sell assets is critical.
This is where an experienced Chapter 7 bankruptcy attorney becomes essential. A knowledgeable lawyer can help you navigate the process, protect what you can, and ensure your case stays on track.