Chapter 7 Bankruptcy is commonly known as fresh start bankruptcy.  It is a viable option for an individual with little assets and significant unsecured debt.  Debts such as medical bills, credit card purchases, personal loans and utility debts are all easily eliminated in a Chapter 7.  Property secured by debt can be retained provided the person continues to make payments on those items.  A typical secured debt would be real estate.  Provided that there is not significant equity in the property, a person can continue to pay for and keep the home.  A vehicle is another example of a secured debt. In a Chapter 7 bankruptcy case, the person has the option of keeping secured property and continuing to pay the debt thereon or surrendering the property and eliminating the debt forever.

Chapter 7 involves the filing of a petition which lists all of the assets and liabilities of the debtor.  A notice of the filing is sent to all creditors who then have the opportunity to object.  While most debts in a chapter 7 are erased, there are several types of debts that do not go away.  They include, but are not limited to student loans, recent taxes, parking tickets, child support, alimony, maintenance and debts incurred by fraud.

The entire process takes about 120 days from filing to discharge.  A person can receive a discharge under Chapter 7 of the bankruptcy code every eight years.