Understanding Bankruptcy, 7/28/2020

BY MICHAEL A. CIBIK, ESQ.
AMERICAN BANKRUPTCY BOARD CERTIFIED
Question: What is Chapter 7 bankruptcy?

Answer:
Chapter 7 bankruptcy is commonly known as liquidation bankruptcy. This type of bankruptcy is best for those who simply cannot repay their debts.

When filing Chapter 7 bankruptcy, the court places a stay on your debts, stopping creditors from collecting and halting foreclosure, repossession of property, and eviction proceedings. The court then assigns a bankruptcy trustee, who will oversee your assets and finances. The bankruptcy trustee helps to sell your nonexempt property and pay back debts on your behalf. The trustee also arranges a creditor meeting to answer questions about your declaration of bankruptcy and to sort out repayment of debts.

Chapter 7 bankruptcy wipes out debts including credit-card debt, medical debt, unsecured personal loans, and certain tax debts.

Some debts, like child support, alimony, student debt, and certain tax debt is not covered by a Chapter 7 filing.

Michael A. Cibik, Esquire
www.ccpclaw.com
ccpc@ccpclaw.com
215-735-1060

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