Chapter 7 bankruptcy is commonly known as “liquidation” because debtors are expected to liquidate or sell important assets in order to honor debts to creditors. In practice, most families can retain ownership of their home and vehicle if they are current on their payments, and many families never have to sell anything.
During the filing process, the bankruptcy court will review your property and decide what items, if any, you will be required to sell to honor the terms of the bankruptcy agreement. The sale of any property takes place under the oversight of a Chapter 7 trustee who is responsible for seeing that this process takes place according to law and that the proceeds resulting from these sales go toward the appropriate creditors. Any remaining dischargeable debt is wiped out and the bankruptcy process is complete.
Small businesses willing to cease operations can file for Chapter 7 liquidation. If a business owner wishes to stay in business, declaring Chapter 13 or 11 may be a better option. Ask a knowledgeable Chapter 7 bankruptcy lawyer if you may be eligible for Chapter 7 and whether this is your best legal option for obtaining relief from debt.
We can help you file your petition with the bankruptcy court and consult with your creditors for you. Contact Reynolds Law Corporation in Davis, California to learn more about declaring Chapter 7 bankruptcy in the State of California.