Among the bankruptcy chapters, chapter 7 bankruptcy is the most common and allows the debtor to solve the financial crisis by selling assets and converting them into liquid money.
It basically involves the liquidation of the debtor’s non-exempt assets once they are turned over to a trustee and its subsequent distribution among the holders of claims (creditors). Since not all creditors will receive money from the proceeds so many of those debts would be waived or discharged.
However taxes, child support, alimony and few kinds of student loans cannot be discharged under the present laws. When Chapter 7 bankruptcy is filed, it cannot be filed again for the next 7 years.
This is information only in nature and is not legal advice nor does it take the place of consulting with a licensed attorney. Please consult with a licensed attorney for your legal rights.