Chapter 7 bankruptcy helps countless people offload some, or all, of their crippling debt so that they can have a fresh start. During the three or four-month process, a bankruptcy trustee will help you to pay back what you can by selling some of your assets.
This is where a lot of people often take pause and ask, “can I even file Chapter 7 bankruptcy if I have no assets?” Yes! In fact, most people who file for Chapter 7 bankruptcy don’t have many assets, if any at all.
What Happens in Chapter 7 Bankruptcy?
Normally, when you file Chapter 7 bankruptcy, your property would become part of your bankruptcy estate. Afterwards, you can use various exemptions to protect your assets from being sold off by the bankruptcy trustee, who would then use the proceeds to repay your creditors.
What Happens in a Chapter 7 No-Asset Bankruptcy Case?
In most Chapter 7 bankruptcy cases, the person who filed rarely has many assets. The property that you do own is probably covered by your state’s or federal bankruptcy exemptions. If you can exempt all your property, and there is nothing left after taking your exemptions, then there is nothing left for a bankruptcy trustee to sell.
This does not make you ineligible to file for bankruptcy! It actually helps your case. Bankruptcy exemptions were created to protect you from losing everything in bankruptcy. You will have enough to start fresh once the bankruptcy process is over.
The Manalapan bankruptcy lawyers are here to help you achieve your goal of becoming debt free, just like they have helped so many people just like you for many years.