Chapter 7 Bankruptcy or "straight bankruptcy" refers to a specific legal form of bankruptcy. It is a procedure supervised by the court. If you file Chapter 7 Bankruptcy, a trustee gathers together all the assets of the debtor. These are then liquidated - turned into cash. Certain items are exempted by law. These are specified personal exemptions allowed by law. You cannot retain assets greater than your personal exemptions. Under Chapter 7 Bankruptcy laws, real estate, boats and other vehicles are non-exempt assets. After liquidating all non-exempt assets, the cash is distributed among the creditors of the debtor with preference given to secured creditors. When you file for Chapter 7 Bankruptcy in the United States, you have to conform to the current strict guidelines set out in the Bankruptcy Abuse Prevention and Consumer Protection Act. This is an amendment of the previous Bankruptcy Code. If you file Chapter 7 Bankruptcy, you should receive a discharge of all debts that fall into this category within 4 months.