When a chapter 7 case has been filed, there are a couple of different variations that need to be highlighted. First, there’s a standard filing where all the documents are included and then a more limited filing that we sometimes call a “bare bones” petition or an emergency filing. In an emergency filing, just a very limited set of documents are filed to get a case number, but all the attachments aren’t there.
The other set of qualifiers are what we call an asset case or a no asset case. You see, in chapter 7, and a lot of times people perceive, you file the paperwork and it’s all upside. The debts are just gone and there’s no other commitment. Unfortunately, that’s not really the full picture.
The exchange that happens in a chapter 7 case is that the federal government gets rid of your debts, but the trade off is that if you have assets that exceed certain necessities that the government has identified, you may have to give up these excess assets as your commitment for the chapter 7 relief. So for someone who doesn’t have assets that exceed the limitation set out by the government, we call that a no asset case. If someone has more than what they’re allowed to keep, then we call that an asset case.
Here we will map out what happens after you file a chapter 7 bankruptcy.