By law, once a creditor or bill collector becomes aware of a filing for bankruptcy protection, it must immediately stop all collection efforts. A provision of the Bankruptcy Code called the automatic stay prevents bill collectors from taking any action to collect debts. A creditor may be liable for court sanctions if it continues to use collection tactics once informed of the bankruptcy.

Ch 7 · Chapter 13 Bankruptcy · Chapter 7 · File Bankruptcy

In a Chapter 7 bankruptcy, many or all of your debts are wiped out completely by liquidating (selling) nonexempt property and paying off your creditors. However, the court assures that you have sufficient assets to make a fresh start and so some assets (exempt property) are not eligible for liquidation. In most cases, you receive a discharge of all dischargeable debts (see below for definition).

Almost any individual, partnership, or corporation can file a Chapter 7 bankruptcy petition. The debtor must reside, have a domicile, a place of business, or property in the United States. You can file a Chapter 7 bankruptcy petition regardless of whether or not you are employed.

In order to be eligible for Chapter 7, the debtor must satisfy a “means test” (see below for definition). The court will evaluate the debtor’s income and expenses to determine if the debtor may proceed under Chapter 7.

If you filed bankruptcy before, your right to a discharge may be affected.

Ch 7 · Chapter 7 · Chapter 7 Bankruptcy · File Bankruptcy

Chapter 13 Bankruptcy · Chapter 7 · Divorce