Definition

• Under Chapter 7 of the Bankruptcy Code, a bankruptcy trustee sells all non-exempt assets of the person going bankrupt. The money raised from this sale is used to pay off debts of the client.
  
  

The Bankruptcy Trustee

• The bankruptcy trustee has two jobs. First, he must declare if there are any assets of the client worth selling to pay off debt. Then, if there are assets, he must get the best price for them, by law, in order to pay as much back to debtors as possible.
  
  

Eligibility

• In order to be eligible, you must have debt you want to discharge, and you must be a individual, or represent a partnership or corporation. However, only an individual can be discharged of remaining debt after an asset liquidation.
  
  

The Process

• After declaring bankruptcy and filing the proper paperwork for Chapter 7, the client must declare all debts and all assets, and then the trustee determines what assets should be liquidated and takes over the process.
  
  

Discharge

• After assets have been liquidated under Chapter 7, the remaining debt that was not paid and is not exempt is discharged, and the person, now bankrupt, is no longer responsible for repaying that debt.