Bankruptcy is a procedure brought in federal court. About 6 months after your case is filed, the bankruptcy court in the area where you reside will issue an Order declaring all your unsecured debts discharged. That means your unsecured creditors which you had before you filed bankruptcy will then forever be barred from contacting you ever again to collect on a debt.

If you are able to make any meaningful payments (even a relatively small percentage of payments) to your unsecured creditors (in addition to your normal living expenses), you will probably be required to file a chapter 13 bankruptcy instead of a chapter 7 bankruptcy.

A chapter 7 bankruptcy is commenced by filing a petition and 30 or more pages of additional paperwork detailing your financial situation. Immediately upon filing, your creditors are prohibited from bothering you or attempting to collect on the debts. A trustee is appointed by the court to review your filing and to recommend to the court that your debts be discharged, that is, wiped out. About 4 to 5 weeks after filing, you have to appear for a trustee meeting which is mostly a formality.

Although you are not required to state a reason or explainwhy you are filing bankruptcy, the most common reasons for consumer bankrupcy are often beyond the control of the individual debtor:

Almost any individual, partnership, or corporation may file a Chapter 7 bankruptcy petition if he or she resides, has a domicile, a place of business, or property in the United States. If you filed a prior bankruptcy petition and the prior proceeding was dismissed within the last 180 days, you may not be able to file a second petition.

NO! Often people file bankruptcy before they are seriously delinquent on their monthly debts. If you can barely make the minimum payments required on your credit cards, or if it appears that you will not be able to make payments as they come due, it may be better for you to file bankruptcy rather than let your situation deteriorate. YES! A federal injunction (automatic stay) goes into effect immediately when a person files bankruptcy, which stops the foreclosure.

The laws regarding the seizure of property vary from state to state. In Oklahoma, exempt assets in property include: Homestead - Real property or manufactured home to an unlimited value up to 1/4 acre, otherwise up to $5,000 for up to one acre in city or town and up to 160 acres elsewhere. Insurance - Includes assessment or mutual benefits, fraternal benefit society benefits, funeral benefits prepaid & placed in trust, group life policy or proceeds, and limited stock insurance benefits.

A:Title 11, which is the United State Bankruptcy Code, is broken down into Chapters. "Chapter 7" of Title 11 deals with liquidation bankruptcy.

Chapter 7 bankruptcy will wipe out (discharge) most of the average person's debts, i.e., he will no longer be under a legal obligation to pay them.

Chapter 7 bankruptcy can only be filed once within a Congressionally-mandated period of time. If the debtor gets into even worse financial trouble down the road, then he may not be able to obtain relief through Chapter 7 for his new financial problems. Another negative consequence of Chapter 7 bankruptcy is that some or all of the debtor's assets may be taken away by the bankruptcy court in order to pay off his debts.

A Chapter 7 bankruptcy is sometimes called a liquidation. All of your non-exempt property is turned over to the Chapter 7 trustee who sells it and uses the money received to pay your unsecured creditors on a pro-rata basis. You can then receive a discharge and get a fresh start.