Defention Chapter 7 of Debt

Major Advantages of Debt Settlement Like Paying Less Than 50% Chapter 7 Bankruptcy is also called "liquidation" or "Straight Bankruptcy". It is quick and simple to file and is availabe to almost anyone including partnerships and corporations. The purpoe of this bankruptcy law is to give a person a fresh start by wiping his slate clean of debts. The most common reasons people file Chapter 7 are large medical expenses, unemployment, very serious credit card debt and other large unexpected bills.  When you file Chapter 7 Bankruptcy a trustee is appointed by the courts who evaluates all your non-exempt property, sells it and then pays off your debt with the money made from the sale. It is not the usual case that someone loses all his or her assets though. If you sign a reaffirmation agreement, you can keep your car and home and continue to make their payments. Besides your home being exempt from being sold off other things that are exempt are your car, your life insurance contract (unmatured), proceeds from a judgment, social security, disability, veteran's or unemployment benefits. Prescription health aids are also included.  Anyone can file for Chapter 7 Bankruptcy but people in business usually do not because of the prospect of liquidation of their assets. Chapter 11 is a better option often for people with partnerships and corporations. If you have regular income your probably better off filing Chapter 13 bankruptcy.  If you have filed a Chapter 13 plan in the last eight years, you cannot file for Chapter 7 bankruptcy. Chapter 7 bankruptcy eliminates most unsecured debt. It also allows you to keep certain assets such as your home and car. If you have garnishments against you, filing may help stop it and you can put your income to better use.