Chapter 7 is that part of the federal bankruptcy laws that permits a person to discharge certain debts by filing a case in the bankruptcy court, turning all of his or her nonexempt property over to a trustee, and obeying the orders and rules of the court. A person who files under Chapter 7 is called a debtor.

It is a court order releasing a debtor from all of his or her dischargeable debts and ordering the creditors not to attempt to collect them from the debtor. A debt that is discharged is one from which the debtor is released and does not have to pay. Some debts, however, are not released by Chapter 7 Discharge, and some persons are not eligible for a Chapter 7 Discharge.

A Chapter 7 case is filed in the office of the Clerk of the Bankruptcy Court in the district in which you have lived or maintained your principal place of business for the greatest portion of the last 180 days. The Bankruptcy Court is a federal court and is a unit of the United States District Court.

Yes. A husband and wife may file a joint petition under Chapter 7 using the same set of forms. Also, only one filing fee is charged for a joint case.

The filing of a Chapter 7 case automatically stays or stops most lawsuits and attachments that have been filed against the debtor. A few days after a Chapter 7 case is filed, the court will mail a notice to all creditors ordering them to refrain from any further action against the debtor.

It will usually worsen it, if that is possible. However, some financial institutions openly solicit business from persons who have recently filed under Chapter 7, apparently because it will be at least 6 years before they can again file under Chapter 7.

When a Chapter 7 case is filed, it becomes a public record, and the name of the debtor may be published by some credit-reporting agencies. However, newspapers do not usually report or publish the names of consumers who file under Chapter 7.

No. Filing under Chapter 7 is not a criminal proceeding, and a person does not lose any civil or constitutional rights by filing.

It is illegal for either private or governmental employers to discriminate against a person as to employment because that person has filed under Chapter 7.

Under the state and federal laws, certain properties are declared to be exempt and cannot be taken by a person's creditors except those with valid mortgages on the exempt property. A debtor is allowed to keep his unmortgaged property in a Chapter 7 case and must turn only his nonexempt property over to the trustee in the case. By planning ahead, it is often possible to minimize the amount of nonexempt property that the debtor will have to turn over to the trustee in the case.

The first court appearance will be about a month after the case is filed for a hearing called the Meeting of Creditors. At this hearing, the debtor will be put under oath and questioned about his money, property, and debts by the hearing officer or the trustee. In most Chapter 7 cases of consumers, none of the creditors appear in court, but if one does appear, he will be allowed to question the debtor.

The trustee is an officer of the court, appointed to gather the debtor's nonexempt property, turn it into cash, and pay the money out to the proper creditors.

A Chapter 7 case begins with the filing of the case and ends with the closing of the case by the court. If the debtor has no nonexempt money or property for the trustee to collect, the case will most likely be closed shortly after the debtor receives his Discharge, which is usually about 4 months after the case is filed.

A Chapter 7 Discharge releases only the debtor. The liability of any other party on a debt is not affected by a Chapter 7 discharge.

The debtor's attorney performs the following functions in a Chapter 7 case of a typical consumer: