What Is A Chapter 7 Bankruptcy?

A. Chapter 7 is the most frequently used chapter because it involves the complete liquidation of a debtor's property, with the proceeds used to pay off the debts. However, the debtor can retain certain exempt property under Federal law and/or State law, such as tools of one's trade, limited equity in a car and house, and some personal effects. If you use Chapter 7 you may lose your home (depending on your state) but it does enable you to get out from under the burden of debt more quickly.

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