No-asset Chapter 7

When a chapter 7 bankruptcy case has no property available to pay unsecured creditors, it is referred to as a no-asset case. When exemptions are available to protect all of a debtor's property, this typically results in a no-asset chapter 7. In these cases, creditors may not even be asked to file claims.

Related Term: 
Bankruptcy Estate

Frequently Asked Questions

Our frequently asked questions also address No-asset Chapter 7:

When are claims filed in my Chapter 7 Bankruptcy?

For proof of claim filing requirements, chapter 7 cases have to be considered in two groups: (1) Asset Cases, where the trustee is selling property and paying creditors, and (2) No-asset Chapter 7 Cases, where all property is covered by one or more property exemptions.

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How is the chapter 7 trustee paid?

There are basically three sources of compensation for a chapter 7 trustee: (1) $61 out of the $306 filing fee the debtor paid to file the case with the bankruptcy court; (2) compensation for making distributions to creditors; and (3) attorney's fees charged against the bankruptcy estate. In a no-asset chapter 7, where the debtor has claimed all of his or her property as exempt and there are no other recoveries to be had for benefit of creditors, only the first source of compensation is available.

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