A Chapter 7 bankruptcy is a debt liquidation.  After filing a successful Chapter 7 bankruptcy petition, most consumer debt is discharged.  This means that you are no longer required to pay the debt.  It is important to realize that not all debt can be discharged with a bankruptcy.  For example, debts like back taxes and student loans usually cannot be discharged. 

In this economy, many people are feeling the crunch for many different reasons.  Costs of daily necessities are rising.  People are losing their jobs or being asked to take pay cuts.  Many who have lost their jobs have also lost their health insurance.  Medical bills can often be very expensive.  Some people find themselves using their credit cards to pay for normal everyday expenses.  Others use cash advances on one credit card to pay for another.  The list goes on and on, but the bottom line is that there are too many people drowning in too much debt because of the economy, catastrophic health issues, bad judgment, etc.  Sooner or later, there is an inescapable pile of debt that at first can seem overwhelming.  Bills keep coming (and being thrown in the trash).  Collectors keep calling (and getting ignored).  Interest keeps increasing the bottom line.  Ignoring financial problems won’t make them go away.  Eventually, everyone has to face their problems.  Chapter 7 can be a viable option for some.  However, Chapter 7 is not for anyone.  Because of the changes to the law, if you are working, the Federal Government would like you to pay your debt.  Some individuals may not qualify for a Chapter 7 discharge if their income is too high.  These individuals may still qualify for bankruptcy relief under Chapter 13.

Click here for a detailed explanation of the Chapter 7 Process.