CHAPTER 7 - LIQUIDATION
Chapter 7 is the usual vehicle for discharging (extinguishing) debts for individuals (although business entities can also file) who have incurred debt beyond their ability to pay. In general, a Trustee is appointed to liquidate the debtor's non-exempt assets. The resulting cash is distributed to creditors.
Goldstein Bershad Fried & Lieberman represents both business and consumer debtors. Our business practice is oriented toward professionals in financial distress (doctors, lawyers, accountants, etc.), business debtors, tax claims, landlords, secured claims, as well as bankruptcy litigation including dischargeability issues, fraudulent conveyances, and motions to lift stay.
CHAPTER 7
QUICK POINTS:
- Quick and cheap
- Debtor keeps exempt assets
- Most debts are discharged
All lawsuits and efforts by creditors to collect are stopped. A Trustee is appointed to liquidate the debtor’s non-exempt assets.
The Trustee distributes the proceed of liquidation to creditors on a pro-rata basis according to certain priorities (generally, fees and taxes first).
Most debts are extinguished, including certain taxes.
WHAT YOU NEED TO KNOW ABOUT BANKRUPTCY AND INSOLVENCY
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