Serving Vallejo, Solano, Napa, Alameda and Contra Costa Counties.

Robert Hale McConnell

What Is Chapter 7?

Chapter 7 Bankruptcy is designed for debtors in financial difficulty who do not have the financial ability to pay existing debts. It's called liquidation bankruptcy because the bankruptcy trustee may take and sell ("liquidate") some of your property to pay back some of your debt. However, you may keep property that is protected (also called "exempt") under state law.   Once your Chapter 7 bankruptcy has been filed, this puts into effect an "Order for Relief" -- known informally as the "automatic stay," which immediately stops most creditors from trying to collect what you owe them. So, at least temporarily, creditors cannot legally grab ("garnish") your wages, empty your bank account, go after your car, house, or other property, or cut off your utility service or welfare benefits

The purpose of a Chapter 7 is to obtain a discharge of your existing permissible debts. Even if you receive a discharge, there are some debts that are not dischargeable, such as certain taxes, student loans, alimony and child support, and criminal restitution.  Also to receive your discharge, you must comply with the requirements of the bankruptcy process.