Chapter 7

What is Chapter 7?

Chapter 7 is one of legal terms that means The chapter of the Bankruptcy Code providing for ‘liquidation,’ that is, the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors. In order to be eligible for Chapter 7, the debtor must satisfy a ‘means test.’ The court will evaluate the debtor’s income and expenses to determine if the debtor may proceed under Chapter 7.

 

source: uscourts.gov/glossary

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