Chapter 7 Background
Have Questions? Call Our San Jose Chp. 7 Attorneys
A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in
chapter 13. Instead, the
bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds
of such assets to pay holders of claims (creditors) in accordance with
the provisions of the Bankruptcy Code. Part of the debtor's property
may be subject to liens and mortgages that pledge the property to other
creditors. In addition, the Bankruptcy Code will allow the debtor to keep
certain "exempt" property; but a trustee will liquidate the
debtor's remaining assets. Accordingly, potential debtors should realize
that the filing of a petition under chapter 7 may result in the loss of property.