Chapter 7 Can Be Used by Businesses to Liquidate Assets

On November 6, 2009, the New York Times reported Jason Rodriguez violently fired at his former employment in downtown Orlando, FL.  The engineer gave his life away when he randomly shot 6 individuals, injuring 5 and 1 killed at the scene.  The shooting stemmed from anger in being let go from a job in 2007 at an architectural firm.  Rodriguez filed for bankruptcy and was employed at a Subway shop.

It appeared hard for his former employer to understand why he would still be angry at the termination, after such a long time.  However, those who have jobs, are not in debt, or are otherwise productive, may not realize angry thoughts continue to play over and over when someone is stuck at the same place or unemployed for a long period of time.  The unemployed today have taken much longer to find new positions, with some taking possibly over a year to land only an independent contractor gig, a part-time job, or temporary employment.

It appeared Rodriguez allowed an injury to go beyond its original scope, defining his self-image based on one company or job, but compassion is what separates an experienced New York bankruptcy attorney from those who criticize debtors as being failures.  A qualified NY bankruptcy lawyer is an ally and can advise on legal proceedings, budgeting, fraud prevention, and resilience.  Bankruptcy is not a symbol of imperfection, but an unleashing of the past, and a test in courage to face the mystery that comes.

Bankruptcy proceedings are governed by federal law – the Bankruptcy Code, found at Title 11 of the United States Code. Title 11 contains numbered chapters that define eligibility to Chapter 7, Chapter 9, Chapter 11, Chapter 12, Chapter 13 and Chapter 15.

Chapter 7 can be used by businesses and consumers to liquidate assets to pay off creditors such as credit card companies.  Once a person files Chapter 7, the person is immediately notified by a court about a 341 creditors hearing.  If all goes well during a 341 hearing, the debtor’s case gets set for discharge.

A Chapter 7 debtor cannot reorganize.  Unlike other bankruptcy chapters, the debtor does not reemerge from bankruptcy with restructured debt.  In Chapter 7, upon the filing of the petition, a trustee oversees sell off of the debtor’s assets. The trustee is assigned to a case randomly from eligible panel trustees in the district where the case is filed.  For a small business, the trustee takes over control from an entity’s board and managment team.

Engage an experienced New York bankruptcy attorney who keeps up with the news and changes in bankruptcy laws and regulations for counseling on bankruptcy proceedings.