The majority of Chapter 7 petitioners file what is called a “no-asset” bankruptcy. This type of filing declares that the petitioner does not have any valuable, non-exempt assets that are worth liquidation. This is a common occurrence, as only 7% of a petitioner sample filed their petition with liquidable assets.
All filing procedures are the same regardless of the type of Chapter 7 bankruptcy you move forward with. Whether your petition falls under an “asset” or “no asset” bankruptcy will depend on if your paperwork proves you have unprotected assets that are applicable for liquidation.
If you do qualify for a “no asset” Chapter 7, your unsecured debt will be discharged without any further duty to repay. It is important to note that not all non-exempt assets will be liquidated. All of this depends on the decision of the trustee to liquidate, and they could choose not to for many reasons.