There is an excellent book that provides both a thorough perspective and key detail about chapter 7 and chapter 13 bankruptcy:
"The New Bankruptcy, will it work for You?" 3rd edition, by Stephen...
Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve: Qualified principal residence indebtedness: This is the exception created by...
Chapter 7: This chapter of bankruptcy law provides for a full liquidation of an entity's non-exempt property to satisfy creditors, and discharges all dischargeable debts
This is a legal process...
Basically, most UNsecured types of debts (there are some exceptions I believe, primarilary Student Loans), may be relieved.
Compensatingly, most above the basic need assets can be seized and sold to...