Chapter 7 bankruptcy
This is the bedrock of bankruptcy practice. In a chapter 7, or liquidation, bankruptcy, the debtor is able to get rid of most, if not all, of their debt within a few months, and without the need for a payment plan. Although this is a “liquidation” proceeding, the majority of our clients conclude their chapter 7 bankruptcy cases without losing any of their assets. Because of the injunctive effect of the automatic stay, debtors receive immediate relief from creditor collection activity on or soon after the filing date.
This is quick and usually fairly simple. Pitfalls abound, however, in even the simplest cases. It is important to have an experienced attorney to advise you on what actions to take before the filing date, to prepare your papers so there are as few problems as possible during the case and, if necessary, to negotiate with the bankruptcy trustee to, among other things, retain otherwise non-exempt assets.