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Chapter 7 - Liquidation
A chapter 7 bankruptcy is the most common type of bankruptcy. It is also referred to as a Straight Bankruptcy, a Total Bankruptcy, or a Fresh Start Bankruptcy. In a chapter 7, certain kinds of debt are usually forgiven. These debts generally credit cards, signature loans, medical debt, and other loans that are not secured by assets. Certain debts like student loans, some kinds of taxes, child support, alimony, fraud, criminal restitution, or motor vehicle accidents involving drugs or alcohol can not be forgiven by a chapter 7 bankruptcy.

In exchange for debt forgiveness, you agree to keep only certain kinds of property, "exempt" property, and turn the rest of what you own, "nonexempt" property, over to your creditors. Before you worry too much about turning over nonexempt property to your creditors, please review the table below to better understand all that is included in your exempt property.

EXEMPT PROPERTY
Homestead
One of the most important things you can keep is your homestead. This means your home, your mobile home, and a certain amount of land. Of course, if you are currently paying a mortgage or other debt against your home, you will continue to make those payments.
Personal Property
Your exempt personal property includes cash on hand, money in your bank accounts, household goods, tools, and jewelry.
Employment Benefits
You are allowed to keep benefits that you have earned including employee contributions to ERISA retirement plans, workers' compensation benefits, and unemployment compensation benefits. ERISA retirement plans include your 401(k) plan, IRA, and KEOUGH retirement plans.
Other Property
It is important to speak with your attorney to learn more about federal and state exemptions. We will help you determine other property that you can include in your exempt properties and we will help you keep all of your property that the law allows. If you are worried about losing your property, we can help.

 

While the information presented in this web site accurately reflects my interpretation of the law, it should not be used as a substitute for legal advice. If you are interested in learning more about these and other services that we offer, please contact us at (615) 860-3130 or email us at

(c)2008 Law Offices of Robert T. Johnson, Attorney