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Chapter 7 Bankruptcy

Chapter 7 bankruptcy cases are typically called Liquidation cases.  This is because it involves the court-supervised process in which the trustee takes any non-exempt property of the Debtor, sell it, and makes distributions to the Debtor's creditors based on the amount of each creditors claim.  This is of course is also subject to the amount of the Debtor's Exemptions and whether a creditor has perfected any type of security interest, such as a mortgage lien.  Exemptions are assets that are protected from creditor's claims.  For example, in Florida contributions to a Prepaid College Program are protected by Florida Statute 222.22.

For cases where there is little or no nonexempt property, there may not be an actual liquidation of assets.  This is called a "no asset" case.  Since no assets are liquidated, creditor's do not receive any distributions in these cases.  The debtor receives a discharge after a few months when all the deadlines for objections have expired.

To see if you qualify for a Chapter 7 Bankruptcy you should see a qualified Bankruptcy attorney.  That attorney will have to review your household income, the assets owned by you, and the types of debts owed by you to see if you are a good candidate.       
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 Disclaimer:   The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your situation.