What is a Chapter 7 Bankruptcy?

Don’t let the stigma of bankruptcy keep you from solving your financial problems! Alberto Montefalcon is here to assist you if your financial position necessitates the consideration of a bankruptcy case filing under Chapter 7, 11, or 13. Schedule a consultation at any of our three conveniently located offices.

One of the primary purposes of bankruptcy is to discharge certain debts to provide an individual debtor with a “fresh start.” Once discharged, a debtor has no liability for a debt. In chapter 7 cases, a discharge is only available to individual debtors. It is not available to partnerships or corporations. The right to a discharge in a chapter 7 case is not absolute, and some types of debts are not dischargeable. Also, a bankruptcy discharge does not extinguish a lien on property, whether real or personal.

Unlike chapter 13 cases, a chapter 7 bankruptcy case does not involve filing a plan of reorganization and repayment of debts. Rather, a bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses their proceeds to repay creditors as established by federal law in the Bankruptcy Code. Debtors may keep any exempt property and part of the debtor’s property may be subject to liens and mortgages. A trustee will liquidate the debtor’s remaining assets. Thus, prospective debtors should know that even when filing a chapter 7 case, some loss of assets may result.

To learn more about bankruptcy, contact the experienced Sacramento metropolitan area/Northern California attorneys at the Montefalcon Law Offices. Contact us online or schedule a free consultation at any of our three conveniently located offices. Telephone our downtown Sacramento office at (916) 444 0440, our south Sacramento office at (916) 399-9944, or our Concord office at (925) 222-5929.