Chapter 7 is the most common form of bankruptcy and was created to give people a fresh financial start.
A Chapter 7 bankruptcy filing will:
A Chapter 7 bankruptcy filing generally will NOT:
If you own personal belongings or have property or claims with equity that is above what can be protected under bankruptcy law, and you want to keep the property, then Chapter 7 may not be the best option for you and a Chapter 13 bankruptcy repayment plan (see Chapter 13 section) may be a better fit.
Eligibility to file Chapter 7 is also based on a review of your income from all sources. If your income is not enough to repay your unsecured debt, even in part, you will probably qualify to file a Chapter 7 bankruptcy. However, under bankruptcy law, if you earn more than a specified amount (based on government statistics compiled by state and size of family), your attorney will need to complete a comprehensive “means test” analysis for your case. In general, the means test result will determine if you still qualify to file a Chapter 7 case or if you should be required to pay back some or all of your debts. If some repayment appears to be required, a Chapter 13 bankruptcy plan may be the appropriate alternative.