Asked 7/30/2010
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What is a Chapter 7 Bankruptcy? What is a Chapter 7 Bankruptcy? |
Answer 1/2 - Submitted 5/2/2011
Chapter 7 refers to a part of Title 11 of the United States Code, which is the part of the federal law dealing with bankruptcy.
In Chapter 7, all the rules are set out for how to liquidate the estate and property and holdings of any kind, and then distribute money fairly to each of the creditors to whom money is owed.
Other chapters in Title 11, such as Chapters 11 and 13, also deal with bankruptcy, but they are more concerned with how to reorganize businesses and business people who file for bankruptcy.
Answer 2/2 - Submitted 6/2/2011
Chapter 7 bankruptcy is when you get all your debt whipped out and you do not have to repay it. However there are some limits to this such as owing the IRS, student loans, and child support. Otherwise, you must be able to prove that you have no way of paying back your debt. You will have a clean slate once the bankruptcy kicks in however it can remain on your credit report for up to 10 years.
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