Chapter 7 gives you a fresh start, while permitting you to pay every bill you are able to pay and wish to pay. Chapter 7 eliminates those debts you are not able or do not want to pay. Valid liens, security agreements and mortgages survive Chapter 7 even though the underlying debt is discharged. Creditors who could repossess your car or furnishings, or foreclose on your home, may still retake their collateral if you get behind in your payments after the bankruptcy is closed. However, you are not responsible for the payment of any deficiency after your collateral is sold.

There is a common misconception that you lose your property in a Chapter 7. The bankruptcy act provides very generous exemptions that allow you to keep all property classified as exempt. Your Court appointed Trustee might sell any property that is not exempt. However, very few people have any property that exceeds the allowed exemptions.