Stephen R. Harris, Esq.
6151 Lakeside Drive
Reno, NV 89511
Nevada Bar #001463
Chapter 7 Bankruptcy
Chapter 7 Consumer Bankruptcy
Chapter 7 is a liquidation bankruptcy. All debtor’s non-exempt assets are sold or otherwise liquidated to create a fund to pay creditors’ claims. In exchange, a debtors debts are discharged, meaning the legal duty to pay them is extinguished. See Exemptions section under Resources or at bottom right tab of home page. IN order to keep something that is subject to a lien, such as a vehicle with a car loan, the debtor must reaffirm the loan or pay the value of the item in order to keep it.
Chapter 7 Business Bankruptcy
Helping Businesses Out of a Difficult Situation
Chapter 7 refers to the provision of the United States Bankruptcy Code that pennits a business in financial distress to liquidate or sell its assets for the benefit of its creditors. When a business files a Chapter 7 petition it immediately ceases operations and a trustee is appointed to take control of its assets, sell those assets and distribute the proceeds to creditors. At the same time, creditors are automatically enjoined from starting or continuing any efforts to collect debts that are owed them. The decision to file a Chapter 7 petition is usually the most difficult and painful decision a business ever has to make. This is particularly true for businesses with perhaps a single owner or a few owners who have invested years of their time, energy and resources in the business. However, it is often the only viable solution.
When Should I File Chapter 7 Petition?
Chapter 7 liquidation is generally a last resort after all other efforts have failed. If there is a way to resolve your debt problems and avoid bankruptcy by negotiating modifications of existing obligations, I will help you do that. However, if your business does not have sufficient prospects to continue operating, filing a Chapter 7 petition wiIl enable your business to shut down in an orderly manner and ensure that creditors are treated fairly and equitably.
Am I Responsible for the Debts of My Business?
A Chapter 7 petition relieves a corporation or a limited liability company of its debt obligations but it does not necessarily protect a sole proprietor or partner in a partnership from creditor claims for collection of the debts of the business. Even in the case of corporations, the principals of the business may have continuing liability for personal guarantees for payment of certain debts required by a creditor as a condition to providing goods or services or providing financing. In some instances, shareholders and owners may also be liable for the unpaid tax obligations of the business. If you are personally responsible for business debts, I can provide advice on how best to minimize those obligations.
For more information about Chapter 7 or to schedule a consultation with our Law Firm, call 775-690-9120.
Bankruptcy is an invaluable tool for financially troubled companies and their creditors. Unfortunately, it is too often a costly, time-consuming and uncertain process. It doesn't have to be. I am committed to finding a way to make that process as efficient and successful as possible for our clients. I am passionate about practicing law in a way that is designed to produce the best possible results for our clients.