Chapter 7 Bankruptcy

This is what most people think of when they talk about bankruptcy. It is sometimes called "liquidation." It allows you to discharge your debts. This is done by selling non_exempt property to pay creditors. Usually most property is exempt other than very valuable property and property that was used to secure a loan that cannot be paid off. If your income is over the median family income, you will have to complete a means test to show that based on your income and expenses you cannot pay off your unsecured creditors. If you can't file a chapter 7 bankruptcy, you may still be able to file a chapter 13 bankruptcy.