A chapter 7 bankruptcy can be filed (or can be even forced to file by creditors) in federal court when a business is badly in debt and unable to service that debt or to pay back its creditors.
A chapter 7 bankruptcy means that the business ceases its operation.
The cessation of business operation by debtors does not mean that all employee of the company will loose their job. When a very large company enters Chapter 7 bankruptcy, entire divisions of the company may be sold intact to other companies during the liquidation. The debtors’ petition filed in the court includes detailed financial information like his/her assets, debts, income and list of the assets that are being claimed as exempt.
The court appoints a trustee whose roles is to review the bankruptcy filing, conduct the meeting of creditors, review the debtor’s eligibility for a discharge, liquidate (sell) any non-exempt assets and to distribute the proceeds to creditors. The court proceedings normally take 3-4 months.
In case, you are about to file a bankruptcy but are clueless where to begin from, get counsel attorneys that have a sound understanding of bankruptcy. Bankruptcy cases are intricate and need consultancy of lawyers who can handle the same. Lawyers with sound knowledge and vast experience in solving bankruptcy cases are best to approach who guide you as well as assist you in the entire case.