Chapter 7 Non Assets
In a bankruptcy case under chapter 7, you file a petition asking the court to discharge your debts. The basic idea in a chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for your giving up property, except for “exempt” property which the law allows you to keep. In most cases, all of your property will be exempt. But property which is not exempt is sold, with the money distributed to creditors.
In a chapter 7 No Asset Case is where the debtor has inadequate assets and money to repay the unsecured creditors. In this type of case all of the debtor’s property is exempt from liquidation, meaning that creditor’s will not have to file proofs of claim since there will be no distribution.