02 January ,2014 By Admin Category:Bankruptcy

Chapter 7 bankruptcy, also called “straight” bankruptcy, is designed to give you a fresh start on your finances. It eliminates most types of debt, and in return the bankruptcy trustee sells your nonexempt property in order to provide partial repayment to creditors. Luckily, most people have very little to no property that is not exempt, most Chapter 7 bankruptcy filers end up keeping most, if not all of their property.

Chapter 7 bankruptcy wipes out most types of unsecured debt. Unsecured debts are those debts which are not tied to property such as a like a home or car. Typical unsecured debts eliminated by Chapter 7 bankruptcy include credit card debt, medical bills, and gasoline card debt.

It is important to note, however, that some unsecured debt is nondischargebale in Chapter 7 bankruptcy absent some showing of extreme financial hardship beyond a typical inability to pay debts. These debts are not eliminated. Nondischargeable debts include those for child and spousal support, student loans, certain recent debts, debts incurred on the basis of fraud (such as lying on a credit application), and tax debts first due within the previous three years.

Chapter 7 bankruptcy should be seriously considered when you have mounting debt and your income isn’t enough to cover your expenses. Chapter 7 bankruptcy can be right for you and solve many of your financial problems very quickly.