Chapter 7 Bankruptcy is the most common form of bankruptcy. It's ideal for those who cannot afford to repay their debts and are seeking a quick fresh start. If you're overwhelmed by debt, don't have a lot of valuable property, and don't need to stop a foreclosure or repossession, Chapter 7 is likely the right choice for you.
Chapter 7 Bankruptcy
For: Individuals and businesses.
How it works: No payments are made. Instead, a trustee reviews your assets to determine if there are any items of value that are not exempt. That property can be sold with the proceeds to pay the creditors. Most of your unsecured debts (like credit card debt and medical bills) are discharged (wiped out).
Remember: In the vast majority of cases, no property is actually sold. Your bankruptcy attorney will review your assets ahead of time to make sure you are protected.