“Bankruptcies can generally be described as “liquidation” or “reorganization”. Liquidation bankruptcy is called Chapter 7.”(Bankruptcy in Brief) “Liquidation is the most familiar type of bankruptcy proceeding and is often referred to as an ordinary, or straight, bankruptcy.”(Jentz and Miller, 2002, p. 418) Under this chapter, the individual debtor is permitted to keep or “exempt” certain property. The property that is left is “liquidated”-sold by the court appointed trustee-and the money from the sale pays the debts. A Chapter 7 begins with the filings of a petition, schedules of assets and liabilities, and the statement of financial affairs. These documents are standard forms and designed to give the judge and others a complete picture of the debtor’s financial situation. The petition and support documents must be filed at the location (in the federal judicial district) where the debtor lives. After the debtor files under Chapter 7, an impartial person is appointed as the case Trustee. The Trustee’s job is to sell all the “non-exempt” assets and normally to administer the case. One of the forms to be filled out and completed is a schedule of “exempt” property. The Federal Bankruptcy law gives a person the right to keep some of the property from liquidation in bankruptcy. Once the case is filed, all creditors are prohibited by law from any further contact (written or oral) with the debtor. This is called an “automatic stay” or injunction comes into effect as a matter of law. All law suits are stopped, garnishments must cease, and anything else. Then all of the creditors will be notified of the filing and they also will be given a time, place and date of a meeting of creditors. This meeting will allow all creditors to confront the debtor and ask questions about the finances. About 3 months after the meeting of the creditors, the debtor will receive the “discharge”. This “discharge” gets rid of the debtor’s obligation to pay many debts which have not been paid. Remember usually only “unsecured” debts are “discharged” in bankruptcy. Here a

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