Chapter 7 bankruptcy is liquidation bankruptcy. If you are eligible, you can receive a Chapter 7 discharge every 8 years. The entire Chapter 7 Bankruptcy process takes about 3 to 4 months from start to finish in an “average” case.
Filing Chapter 7 invokes the automatic stay and gives you immediate relief from your creditors, stops lawsuits, judgments, and garnishments. Typical debts that can be discharged are credit cards, old rent bills, personal loans, old cell phone bills, pay day loans, vehicle repossessions, debts from a foreclosure, medical bills, some taxes, as well as numerous other types of debt.
Chapter 7 is means tested, therefore your income and assets affect whether you are eligible for Chapter 7. The means test divides filers into below median and above median incomes. A debtor that fails the means test for Chapter 7 may be able to file for Chapter 13 instead. Your assets also factor into whether Chapter 7 is appropriate because Chapter 7 is liquidation. It is extremely important to hire an attorney who is knowledgeable about bankruptcy rules in order to get the best results.
One major difference between Chapter 7 and Chapter 13 is that you have no automatic right to voluntarily dismiss a Chapter 7. Chapter 7 is liquidation bankruptcy- once assets are found above the exemptions, you cannot simply get your case dismissed. Once you are stuck in your asset Chapter 7 case, property can be liquidated.
The consequences of Chapter 7 could be really bad with unintended results if you do not hire a lawyer who knows how to protect your assets and financial well being. Technically, any attorney could handle your Chapter 7, but it is not a good idea just to get any lawyer to do so.