Chapter 7 Bankruptcy

Chapter 7 Bankruptcy

Unlike in chapter 13, a chapter 7 bankruptcy case does not involve the filing of a plan of repayment.

Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay creditors.



Chapter 7 Bankruptcy Chapter 7 Bankruptcy
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A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets.

Fees that must be paid to the clerk of the court upon filing:

  • $245 case filing fee
  • $39 miscellaneous administrative fee
  • $15 trustee surcharge.
  • In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations.

    To qualify for relief under chapter 7, the debtor may be an individual, a partnership, or a corporation or other business entity.

    In a chapter 7 bankruptcy case most of the individual debts is discharged. A discharge releases individual debtors from personal liability for most debts and prevents the creditors to initiate or continue any legal or other action against the debtor to collect a discharged debt.

    Debts not discharged include:

  • Debts for alimony and child support
  • Certain taxes
  • Debts for certain educational benefit overpayments or loans made or guaranteed by a governmental unit
  • Debts for willful and malicious injury by the debtor to another entity or to the property of another entity
  • Debts for death or personal injury caused by the debtor's operation of a motor vehicle while under the influence of alcohol or other substances
  • Debts for certain criminal restitution orders.


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