Chapter 7 bankruptcy is intended to allow a debtor to obtain a fresh financial start. In order to obtain a fresh start, the bankruptcy code allows the debtor to discharge debts and keep keep certain property. The discharge provisions of the bankruptcy laws set forth the types of debts that can be discharged. The exemption provisions of the bankruptcy laws determine the types and the values of property that the debtor will be allowed to keep after the bankruptcy. Proper discharge and exemption planning is crucial to the bankruptcy client.

As soon as a Chapter 7 case is filed, an automatic stay is entered. This means that creditors must immediately stop collection activity. In most cases, the automatic stay will be continued until the bankruptcy case ends with the discharge and that the creditors will not be allowed to take collection action while the bankruptcy case is pending.

Most unsecured debts (debts where the creditor does not have a lien on property) will be discharged in a Chapter 7 consumer bankruptcy case.

In most consumer bankruptcy cases, proper exemption planning means that the debtor will be able to keep all of his or her property.





Chapter 7