A Chapter 7 Bankruptcy allows a debtor to get rid of most of their debts.
A Chapter 7 bankruptcy is also sometimes referred to as a “Fresh Start” bankruptcy since the debtor receives a discharge of his unsecured debts such as credit card bills, medical bills and any other debt that is not secured by a mortgage or collateral mortgage.
The Chapter 7 bankruptcy debtor is also given the option of continuing to pay on his secured debt (such as a home loan) if he is current on the debt, or he can surrender the property and be relieved of further obligation on the debt. As a result, a Chapter 7 debtor can keep a house or car that is secured by a mortgage.
However, certain debts, such as taxes are cannot be discharged in bankruptcy.
The decision to file for bankruptcy and the type of bankruptcy to file are important decisions. You will want to hire an experienced bankruptcy attorney to assist you in making this decision.
by Kevin Gipson, New Orleans, Louisiana bankruptcy lawyer.