What is a Chapter 7 Bankruptcy?

People refer to it in many different ways, like complete discharge, fresh start, etc. What is a chapter 7 bankruptcy?

Let’s just start off. People refer to this a couple of different ways. Fresh start, complete discharge. What’s a Chapter 7?

David Siegel: Chapter 7 is the most common form of bankruptcy. About 75 percent of the cases that are filed are of the Chapter 7 variety, and that’s known as the fresh start bankruptcy. Chapter 7 is where someone has very little in the way of assets, and a lot of debt. Whether it be credit cards, medical bills, personal loans, past due utilities, auto repossessions, foreclosures. Whatever it might be Chapter 7 is a way to eliminate the majority of one’s debt, move forward and get a fresh start. Some exceptions, not every debts eliminated, but Chapter 7 would allow in most cases, either a fresh start completely or the majority of the debt being eliminated, and life goes on. You’re able to wipe the debt away and start fresh.

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