Chapter 7 Bankruptcy is What Most People Think of When They Hear Someone has Filed a Bankruptcy
Technically, a Chapter 7 bankruptcy is a “liquidation proceeding” (as opposed to a “reorganization proceeding”) where a Chapter 7 trustee is appointed to liquidate a debtor’s non-exempt assets. In addition, the Chapter 7 trustee will take other permitted actions designed in an attempt to repay creditors. As a result of the generous exemptions available in the state of Kansas, most people who file this type of bankruptcy are able to keep most, if not all, of their property, while discharging their debt.
Who typically files for Chapter 7?
Typically, most filers have:
- Lost a job and fallen behind on bills
- Recently been divorced
- Incurred medical bills that can’t be paid
- Guaranteed a debt (business or personal) and can’t pay it.
Usually, they are filed by individuals. However, depending on the facts, it can be appropriate for a corporation, limited liability company, or partnership.
