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.