The fundamental purpose of any bankruptcy is to obtain a "discharge".  "Discharge" means the debt is no longer enforceable. 

A Chapter 7 is the simplest and least expensive form of bankruptcy. In a Chapter 7 case a Trustee is appointed. The Trustee’s job is to look for non-exempt assets that can be liquidated to pay creditors.

Some of the hurdles in a Chapter 7 case are qualifying under the “Means Test” and protecting your assets from liquidation. The Means Test is designed to ensure that the debtor is not making “too much money”. The consequence of failing the Means Test is the dismissal of the case. The Means Test is a complicated formula which...

Recently I moderated a program for bankruptcy attorneys which dealt with this scenario:


A Chapter 7 bankruptcy is filed. My clients, the debtors, have one or more mortgages on their home. We have a discussion about whether to "reaffirm" any debts. When you reaffirm a debt it means that you continue to be personally liable for the debt, despite your bankruptcy discharge. Of course, a bankruptcy discharge of your debts is why you filed in the first place, right?  Sometimes the clients reaffirm an automobile loan. We talk about whether they should reaffirm any of the mortgage debts. I advise them not to reaffirm the mortgages. The bankruptcy closes and th...

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