Fort Lauderdale

Divorce and Bankruptcy Attorney


(954) 332-3558

A Chapter 7 Bankruptcy is a liquidation of assets. In theory you must immediately turnover to the bankruptcy estate all assets that are not covered under your allowed exemptions, unless you purchase the assets from the bankruptcy trustee. Most people do not have assets outside of the exemption level, but you must seriously and truthfully review your assets with your Fort Lauderdale Bankruptcy Attorney before filing a chapter 7 bankruptcy.

About 19 out of 20 cases under Chapter 7 Bankruptcy are considered no-asset cases and do not call for the surrender of assets.This is to say that the vast majority of people under Chapter 7 of the Bankruptcy Code do not pay anything to their creditors.


How Chapter 7 Bankruptcy Works:

The focus of Chapter 7 Bankruptcy is called Liquidation Analysis. Under Liquidation Analysis,once the Bankruptcy is filed, the Bankruptcy Court creates a Bankruptcy Estate. The Bankruptcy Estate is comprised of all of the Debtor’s assets and liabilities. Immediately after filing certain assets are exempted out of the Bankruptcy Estate and are
returned to the Debtor. The exempt assets may include but are not limited to Home Equity, A Car up to $1,000 per person, retirement accounts and prepaid college accounts, and other personal assets ranging from $1,000-$5,000 per person. Since most people do not have assets above and beyond the exempt assets most items are immediately exempted out of the Bankruptcy Estate and back to the Debtor. It is important to note that Assets typically do not change hands and most of this is just a legal process and not an actual exchange of assets.

Typically most cases result in a discharge of debt without any contribution or payment from the Debtor. If a payment is necessary it is the Debtor’s choice to make a payment or surrender the assets. The typical case Chapter 7 Bankruptcy is closed and discharged in 4 months.