When discussing the various types of bankruptcy an individual, a small or medium-sized business can file to protect itself from creditors, most often people think of Chapter 7 – a liquidation. According to the United States Courts’ website, Chapter 7 bankruptcy is:
“The chapter of the Bankruptcy Code providing for ‘liquidation,’ ( i.e., the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.)”
For many individuals, a Chapter 7 bankruptcy involves first an analysis of their assets, their liabilities, their income and expenses. From there, we determine what is the best approach to resolving their debts. A Chapter 7 is often favored by clients because it is relatively short, relatively inexpensive, and in many circumstances, offers the most complete relief available in bankruptcy – the discharge or elimination of your unsecured debts.
Chapter 7 of the Bankruptcy Code (11 U.S.C. §701, et seq.) sets forth the requirements and procedures for a debtor – the person or entity filing bankruptcy – to obtain bankruptcy relief. Recent changes to the Bankruptcy Code (the 2005 sweeping amendments to the Code referred to as BAPCPA), now require that attorneys and other “Debt Relief Agencies” explain to potential bankruptcy clients that they have alternatives to filing bankruptcy. A great explanation of these alternatives can be found on the US Court’s own website here. Additional information about Chapter 7 bankruptcy can also be found on the US Court’s website.
If you believe that you need to evaluate your debts and potentially bankruptcy, please call David L. Gibbs at (949) 492-3350, or go to our contact us page and send us an email.