Chapter 7 Bankruptcy

Chapter 7 Bankruptcy Information


A chapter 7 bankruptcy, sometimes called a “straight bankruptcy,” is a liquidation type bankruptcy. In this type of bankruptcy, a court appointed bankruptcy trustee will determine if he can sell any of the assets of the debtors to try and payoff at least some of the debts. 

A chapter 7 trustee generally cannot sell property covered by a debtor’s valid exemptions. Exemptions are laws which allow debtor to retain a certain dollar value of property free from creditors’ claims. A chapter 7 individual debtor can choose to claim exemptions allowed either by the Federal Bankruptcy Code or by the Revised Code of Washington. A debtor who is a business organization (such as an LLC or corporation) cannot claim any exemptions on its assets. 

Think of exemptions as a blanket that covers at least a portion of your assets. Whatever assets are under the exemption blanket cannot be sold by the trustee. Any assets not fully covered by the exemption blanket are subject to liquidation by the trustee, with the debtor being reimbursed for the portion of the asset that was claimed as exempt.  

It has been my experience, in most of my cases, that the assets of the average household of chapter 7 debtors are fully covered by exemptions. In such cases, the debtors will attend a single court hearing about a month after they file the petition called a 341 meeting or meeting of creditors, and will receive their discharge, which wipes out their dischargeable debts, 60 days after the court hearing. Thus on average, Chapter 7 bankruptcies last about 90 days from the filing of the petition. This timetable is fairly common in the realms of a chapter 7 bankruptcy; however, it is still a court proceeding and many other factors may expand this timeline. 

What can a Chapter 7 bankruptcy do for you? A chapter 7 bankruptcy can:

  • Stop Lawsuits and garnishments of wages or bank accounts
  • Stop endless harassing phone calls from debt collectors
  • Wipe out most kinds of debts
  • Allow you to recover garnished funds in some cases 
  • Get a fresh start

Contact  us to learn more about Chapter 7 bankruptcy in Tacoma or Aberdeen area today.



If I have already filed a bankruptcy, can I file another bankruptcy?


Can I remove a mortgage from my house with bankruptcy?


What happens if I file a chapter 13 plan, and later on I lose my job?


Contact us for a free no-obligation bankruptcy consultation