- Commonly referred to as “Liquidation”, involves an orderly, court-supervised procedure by which a trustee takes over the assets of the debtor’s estate, reduces them to cash, and makes distributions to creditors, subject to the debtor’s right to retain certain exempt property and the rights of secured creditors.
- There is usually little or no nonexempt property in most chapter 7 cases and, therefore, there is often no liquidation of assets in chapter 7 cases. These cases are called “no-asset cases.” The debtor normally receives a discharge approximately 90 days after the petition is filed.
- If a debtor’s income is in excess of certain thresholds, the debtor may not be eligible for chapter 7 relief.
- Chapter 7 is available for individuals and corporations.
