A total of 249,152 individual Chapter 7 bankruptcy filings were made in the first nine months of this year in the United States, which is a 15 percent jump compared to the same period last year, the American Bankruptcy Institute (ABI) said in an Oct. 3 statement.
Chapter 7 bankruptcy, also known as liquidation bankruptcy, involves a court-appointed trustee selling off an individual’s nonexempt assets to pay off creditors. It can discharge certain debts, with the individual no longer obliged to pay them.
This is different from a Chapter 13 bankruptcy, where an individual retains all assets, but has to agree on a repayment plan with creditors that can last for three to five years….