To file for Chapter 7 Bankruptcy, the applicant must be a corporation, an individual, or a small business owner. These entities may only file for bankruptcy if they meet certain requirements. For instance, if a person's previous petition for bankruptcy was denied by a legal court, he is not eligible to file for bankruptcy proceedings. In addition, a bankruptcy petition will not be considered if it is determined to be fraudulent or in violation of the Bankruptcy Law.
2. Methodologies:
First, the debtor submits a petition to the local bankruptcy court where he or she resides or where the business is located. The debtor must include the following documents along with the application:
The financial position statements;
Documents pertaining to the title of his or her business's assets and liabilities;
Active lease agreements and other contracts that have not expired;
A history of expenditures and particulars of current income;
A Tax return transcript;
A inventory of his or her creditors and a description of the nature of their claims in relation to the total amount claimed.
3. Termination of Chapter 7:
In Chapter 7 bankruptcy, the insolvent is released from all claims against his or her assets. In the event of chapter 7 discharge, the debtor is also protected from all forms of collection by his or her creditors. The right to discharge is heavily dependent on the debtor's exemptions from liabilities. However, 99.9% of cases are dismissed pursuant to court decisions made in accordance with Chapter 7 regulations.
4. Fiduciary of Chapter 7:
A court appoints a trustee (or liquidator) to investigate a case and determine whether there has been misconduct or a violation of the law. This person(s) is responsible for collecting and liquidating the debtor's assets and reimbursing his/her creditors for the amounts owed. The trustee may also take measures to investigate the case further for any concealed information regarding the debtor's assets or liabilities.""
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