What is Chapter 7 Bankruptcy
A Chapter 7 bankruptcy, also known as a liquidation bankruptcy, might be visualized as three buckets side by side. All of your property is sorted into these three buckets to be distributed between you, and where applicable, your creditors. One bucket is for exempt assets, one is for nonexempt assets, and one is for property that secures an obligation such as a car note or home loan. You retain the property in the exempt bucket, as well as the property in the secured bucket, provided you continue to perform on the secured obligation(s) (you do have the option to surrender the secured property along with the debt if you choose to, and in many cases it makes sense to do just that). The property in the nonexempt bucket is typically dispensed with by the bankruptcy trustee in one of two ways: (1) the bankruptcy trustee auctions the property, or, (2) the bankruptcy trustee allows you to buy back the property. The proceeds are then distributed amongst unsecured creditors in order of priority and/or applied to administrative costs. Unsecured debts remaining after the distribution (with some exceptions such as student loans and domestic support obligations) are discharged. To see what types of property are exempt, Click here for a table of Arizona Bankruptcy exemptions with links to Bankruptcy exemptions for other states. Click here to see rates to File Chapter 7 for ZERO DOWN. Or simply Call hollis 602-354-3890 or Click here to send us a message.