Chapter 7 bankruptcy is the simplest and most common form of bankruptcy. It provides legal protection as you liquidate your business assets.
An individual’s eligibility to file Chapter 7 is determined by the means test instituted by the US Bankruptcy Code.
With the help of experienced bankruptcy lawyers, most people who want to file Chapter 7 can do so.
How to File Chapter 7 Bankruptcy
The chapter 7 bankruptcy case starts by filing the official petition, schedules and statement of financial affairs. These forms prompt you to list all of your assets and all of your debts, along with some recent financial history. It is important that every creditor is listed in the schedules with an accurate mailing address.
For most purposes, the rights of the debtor and the creditors are those that exist on the day the case is filed. All of the proceedings in bankruptcy after the filing relate to the situation as it was on the day the case was filed.
The automatic stay goes into effect upon filing the petition, creating a legal barrier to collection actions by creditors.
The court appoints a trustee and gives notice to all creditors listed in your schedules that you have filed bankruptcy. You will get a copy of that notice at the same time it is sent to creditors.
You may want to consult a bankruptcy attorney Chino if you want to file.