Chapter 7 bankruptcy is the most common type of bankruptcy filing. Under Chapter 7, your non-exempt assets and personal property are sold and the proceeds are used to pay creditors. A Chapter 7 filing may result in the loss of all non-exempt property; however, it can also achieve a complete discharge of all eligible debts and no further obligation to pay discharged debts in the future. There are certain debts that are non-dischargeable under Chapter 7, such as mortgages, liens (such as car loans), child support, alimony or debts incurred through fraud.
You must pass the Means Test to qualify for Chapter 7 bankruptcy. The Means Test evaluates a debtor’s income, comparing it to the median Florida income for a household of the same size, to determine whether they need Chapter 7 relief. If you pass the Means Test, you are allowed to file for Chapter 7 bankruptcy; if not, you can file for Chapter 13 bankruptcy.