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Chapter 7 Liquidation:
The chapter of the Bankruptcy Code providing for "liquidation." A discharge releases individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor. Because a chapter 7 discharge is subject to many exceptions, though, debtors should consult competent legal counsel before filing to discuss the scope of the discharge. Generally, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of chapter 7 cases. In most cases, unless a party in interest files a complaint objecting to the discharge or a motion to extend the time to object, the bankruptcy court will issue a discharge order relatively early in the case; generally, 60 to 90 days after the date first set for the meeting of creditors. Fed. R. Bankr. P. 4004(c).
Advantages of Chapter 7:
Chapter 7 does not impose a maximum debt limit. Consequently, you can discharge any amount of debt. Further, it is a liquidation of debt; unlike a Chapter 13, you do not need to make any payment or create a payment plan. Chapter 7 bankruptcies are also shorter proceedings than Chapter 13, usually lasting no more than 6 months. Filing a Chapter 7 petition automatically stays most collection actions pending against the petitioner: this includes wage garnishments, collections law suits, and even calls from bill collectors. A Chapter 7 discharge can eliminate all a petitioner's debts.