The purpose in seeking to file a Chapter 7 bankruptcy is generally to get a “Fresh Start” by eliminating certain of your debts. Chapter 7 bankruptcy is a liquidation where the trustee legally has taken control of all of your assets and has to follow the bankruptcy rules regarding selling those assets that are not exempt in some cases partially exemption and in other cases wholly non-exempt.  There are two sets of exclusive exemptions.  Those that are Federal and those that are state specific (see Connecticut and New York Exemptions)  The trustee has the authority and may sell the non-exempt assets which may be distributed to your creditors.  In those cases where an assets is partially exempted, the trustee can sell the the asset and pay you, the debtor, any amount that was exempted. The net proceeds of the liquidation are then distributed to your creditors.  In all cases of a sale the trustee is entitled to seek a commission in relation to his or her administrative oversight on the identification, marketing, sale and distribution of the proceeds of the sale.

Certain debts cannot be discharged in a Chapter 7 bankruptcy, such as alimony, child support, fraudulent debts, certain taxes, student loans, and certain items (including cash advances) charged on a credit based card or loan. (see Connecticut and New York Non-Dischargeable Debts) In most Chapter 7 cases, the debtor has large credit card debt and other unsecured bills and very few assets. In the vast majority of cases a Chapter 7  bankruptcy is able to completely eliminate all of these debts.