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 Missouri, Chapter 7 bankruptcy is a legal process that allows individuals to discharge their unsecured debts by liquidating their nonexempt assets. When a debtor files for Chapter 7, they are not required to submit a repayment plan as they would in a Chapter 13 bankruptcy. Instead, a bankruptcy trustee is appointed to oversee the sale of the debtor's nonexempt property and distribute the proceeds to creditors. Missouri law provides a list of exemptions that allow debtors to keep certain types of property, such as a portion of the equity in their home, a vehicle up to a certain value, and basic household goods, among others. However, if the debtor has nonexempt assets, these will be sold off. It's important to note that some property may be secured by liens or mortgages, and such secured creditors have rights to the property that may affect the liquidation process. Debtors considering Chapter 7 should be aware that while it can provide a fresh start by eliminating many types of debt, it may also result in the loss of property.