Chapter 7 – Liquidation

Liquidation- The basic theory behind Chapter 7 liquidation is you sell everything you have for the benefit of creditors. That means that you sell your stuff and use the proceeds of the sale to pay off your creditors. Whoever is not paid off at the end of the process gets discharged. In a Chapter 7 it is the bankruptcy trustee’s job to find and sell assets for the benefit of creditors. That means that the trustee wants to find your stuff that is worth money so that he can sell it to pay your creditors.