Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also known as "liquidation bankruptcy," is a legal process that allows individuals and businesses to discharge most of their unsecured debts. This type of bankruptcy involves selling non-exempt assets to pay off creditors, and any remaining eligible debts are typically forgiven.

To file for Chapter 7 bankruptcy, you must pass a means test that determines your eligibility. This test compares your income to the median income in your state, and if you earn less than the median, you may qualify. However, if you earn more than the median, you may still be able to file for Chapter 7 if you can demonstrate that you have significant expenses or other circumstances that justify your need for this type of bankruptcy.

Chapter 7 bankruptcy can be a powerful tool for individuals and businesses struggling with overwhelming debt. However, it is not without consequences. For example, it will negatively affect your credit score and can remain on your credit report for up to 10 years. So, it's important to consult with a qualified bankruptcy attorney before deciding if Chapter 7 bankruptcy is the right choice.