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Chapter 7 Bankruptcy is the most common form of bankruptcy. It is a liquidation proceeding in which the debtor’s non-exempt assets are sold by a trustee and the proceeds are distributed to creditors according to the priorities established in the Code. In other words, the debts are wiped out, though certain debts cannot be discharged (see dischargeable and nondischargeable debts).

During a Chapter 7 Bankruptcy proceeding, about a month after you file the case, there is a meeting of the creditors – however, it is rare that creditors actually show up for this meeting. This meeting lasts about five minutes. Three to six months later, you receive notice that your debts are discharged. Wages the debtor earns after the case is begun are beyond the reach of creditors who had claims on the date of filing.


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