The present economic condition prevailing in the country has resulted in the debt crisis escalating to disturbing proportions. Many people are faced with the question of how to settle their credit. Filing for bankruptcy is one of the available options. These are some facts on Chapter 7 Bankruptcy.

It is the most commonly filed bankruptcy petition and is available to individuals, married couples, partnerships and corporations.

Income and expenses are examined for a “means test” to determine if you are eligible to file a petition.

The petition needs to be filed in court along with schedules and statement of financial affairs. An “automatic stay” is imposed on creditors prohibiting them from calling you or filing action against you while the proceedings are going on.

Discussions will be held with the creditors to discuss whether the debt should be discharged or if the debtor wants to reaffirm the debt.

Once the decisions are made, the duly appointed Trustee will liquidate non exempt properties and distribute proceeds among creditors. Essential properties including residence and social security and unemployment benefits fall within the ambit of exempt property which cannot be liquidated to settle creditors.