How Chapter 7 Works

A Chapter 7 bankruptcy is a simple way to eliminate debt. A bankruptcy discharges, or wipes out, unsecured debts, such as:

•Medical bills
•Credit card bills
•Mobile phone bills
•Personal loans

A Chapter 7 does not eliminate some debts such as:

•Student loans
•Criminal penalties
•Child or spousal support

To file a Chapter 7 bankruptcy, you must prepare papers stating all of your bills and listing all of your property. Most people filing a Chapter 7 keep all of their property. If you have a loan on a house or a vehicle, you may keep those if you agree to keep making payments.