Rhode Island Bankruptcy Law Center at Fabisch Law Offices
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Chapter 7 Bankruptcy

Chapter 7 Individual Bankruptcy

Chapter 7 bankruptcy is otherwise known as “traditional” or “liquidation” bankruptcy. The primary purpose of bankruptcy is to discharge certain debts to give an honest individual debtor a "fresh start." The debtor has no liability for discharged debts. In addition, the Bankruptcy Code will allow the debtor to keep certain "exempt" property. Filing a petition under chapter 7 "automatically stays" (stops) most collection actions against the debtor or the debtor's property. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments.

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