Chapter 7 Information Chapter 11 Information Chapter 13 Information Filing Personal Bankruptcy Filing Business Bankruptcy
What is Chapter 7 Bankruptcy?
Chapter 7 Bankruptcy, also known as straight bankruptcy, is the procedure under
which a debtor can wipe out all their unsecured debts. This chapter calls for
the immediate liquidation of all assets and can be filed by both businesses and
individuals. If you own a business that needs to apply for Chapter 7
liquidation, then it is very likely that you, the individual, will also need to
file for Chapter 7 liquidation. This situation happens most frequently if your
business is not incorporated because you are then responsible for all your
business' debts. All assets, except for those exempt under bankruptcy statutes,
are then liquidated by a court-appointed trustee.
When you file for Chapter 7 liquidation, your business is closed immediately and
all of the property is sold off usually in an auction. You will be lucky if you
even make 10 cents for every dollar you spent on those items. In all likelihood,
you will not even see any of the profit of this liquidation. Every dollar made
goes first to paying off your creditors and the bankruptcy court's fees. You are
left with any other profit but if you had to file for Chapter 7 liquidation in
the first place, the odds are slim that you there will be anything left.
One advantage of Chapter 7 liquidation is that it gives you the opportunity to
start all over and the court proceedings are conducted very quickly. The legal
council knows that you have no money so they are not interested in tying you up
in court for several months. The whole process normally takes two to three
months. Therefore, legal expenses are minimal, starting as low as $500 for small
businesses.
Chapter 7 liquidation, however, should be your last resort. Even though you can
turn over a new leaf, it will be a challenge to do so. You lose your business
and all of its assets, your job, and all of your business contacts. Your
creditors, who may have been friends before, no longer trust you and your
business skills. This filing also destroys your credit rating; a bankruptcy
filing is listed on all your credit reports for at least ten years, so you will
have trouble receiving loans in the future.
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Bankruptcy Protection Online Chapter 7 Information Chapter 11 Information Chapter 13 Information Filing Personal Bankruptcy Filing Business Bankruptcy
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