While the trustee has the power to sell assets, exemptions allow you to protect your assets. |
The Chapter 7 bankruptcy is often what most people think of as a typical bankruptcy. Upon filing, the automatic stay comes into place to prevent collection attempts. Then, a trustee is appointed who has the power to sell unprotected assets, in order to pay back creditors. Finally, at the end, the discharge is entered which ends the debtor's personal liability, giving them a fresh start.
Most Chapter 7 bankruptcies take less than six months, start to finish. The process is more straightforward than a Chapter 13, but gives the debtor less control and less options.
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Because of the trustee's power to sell your assets, Chapter 7 presents dangers that other bankruptcy Chapters do not. |
Chapter 7s are powerful, effective tools for getting back on your feet. But they are also dangerous, and when people hurt themselves in bankruptcy, it is often inside of a poorly-planned Chapter 7.
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