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An Overview of What To Expect
Chapter 7 Bankruptcy is often referred to as a "straight" bankruptcy or a "liquidation." In Chapter 7, any assets not considered exempt under the law (see next section) are turned over to an administrator, known in bankruptcy as the "Trustee." He sells the non exempt property and distributes the money equally among the unsecured creditors. In actual practice, however, very few people are required to turn over any property to the trustee. In exchange for turning over any property not considered exempt under the law, the debtor is entitled to a discharge-is no longer legally obligated to pay unsecured debts (with several exceptions--see Section 2). On secured debts, the debtor either "reaffirms" the debt and continues to make payments; "surrenders" the property back to the creditor or "redeems" the property by making a lump sum payment equivalent to the value of the merchandise to the creditor. 
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