Chapter 7 of the Bankruptcy Code provides for liquidation—the sale of the debtor’s nonexempt property and the distribution of the proceeds to creditors. A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13.

Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor's property may be subject to liens and mortgages that pledge the property to other creditors.

In addition, the Bankruptcy Code will allow the debtor to keep certain "exempt" property; but a trustee will liquidate the debtor's remaining assets. Accordingly, potential debtors should realize that the filing of a petition under chapter 7 may result in the loss of property.

In Connecticut, Chapter 7 bankruptcy is a legal process that allows individuals to discharge their unsecured debts by liquidating their nonexempt assets. The process does not require the filing of a repayment plan as in Chapter 13 bankruptcy. A bankruptcy trustee is appointed to oversee the sale of the debtor's nonexempt property and distribute the proceeds to creditors. Certain property may be exempt from liquidation under Connecticut state law and federal bankruptcy exemptions, allowing the debtor to retain those assets. However, secured debts, such as those with liens or mortgages, may lead to the foreclosure or repossession of the property if the debtor cannot continue payments. It's important for individuals considering Chapter 7 bankruptcy in Connecticut to understand that while it can provide relief from many types of debts, it may also result in the loss of some of their property.