Definition:
The most common type of bankruptcy, Chapter 7 is reserved for those wishing to discharge their debt entirely, and it is generally restricted to those making less than their state's median income. Responsibility for all but certain specific classes of debt is forgiven, but as a way to help pay a portion of the balance, your home, car, and other property may be seized and repossessed. Some of the debts which cannot be discharged under Chapter 7 include past due federal taxes, child support and alimony, and student loans.
