Chapter 7 bankruptcy, also called “straight” or “liquidation” bankruptcy, is named “Chapter 7″ because the law is contained in Chapter 7 of the federal Bankruptcy Code. It is referred to as “straight” because the goal is to get rid of all unsecured debts (credit card, medical, etc.). It is referred to as “liquidation” because the trustee who is assigned your case can sell your non-exempt property to pay your creditors. However, one of the important roles of a bankruptcy attorney is to apply the proper laws to exempt much, if not all, of your property so the trustee does not have to sell it.
Many people do not file bankruptcy because they are worried they will have to give up their cars, their homes, and other property. In most cases, this will not happen if the bankruptcy petition is completed properly. Before assuming that all your property will be sold you should take advantage of the free consultation we offer at Monterey Peninsula Bankruptcy to discuss your bankruptcy options. So if you live anywhere in the Salinas, Santa Cruz, Monterey, or San Benito areas do not hesitate to call for a free consultation.
Chapter 7 bankruptcy helps individuals get a fresh start by allowing them to get rid of debts such as:
Lawsuit judgments (such as deficiency judgments for a repossessed auto and other types)
Unsecured personal loans