Bankruptcy Liquidation

Liquidation is defined as a detailed program of action formulated by a debtor or its creditors to govern the debtor’s rehabilitation, continued operation or liquidation, and payment of debts via the bankruptcy process and sale of bankruptcy liquidation assets. The bankruptcy court and creditors must approve the plan before it is implemented. When filing for bankruptcy it is important to understand what your credit counseling options may be, including understanding bankruptcy filing information.

Under the new Bankruptcy Act of 2005, credit counseling may be required or other options may be required, Contact a Bankruptcy Lawyer to find out all your legal options and rights.

There are two basic types of Bankruptcy proceedings. A filing under Chapter 7 is called liquidation. It is the most common type of bankruptcy proceeding. Bankruptcy liquidation involves the appointment of a trustee who collects the non-exempt property of the debtor, sells it and distributes the proceeds to the creditors.

Factors Litigating Liquidation Restrictions:

• State Laws
• Real Estate Provisions
• Pension and Annuities

Bankruptcy proceedings under Chapters 11, 12, and 13 involves the rehabilitation of the debtor to allow him or her to use future earnings to pay off creditors. Under Chapter 7, 12, 13, and some 11 proceedings, a trustee is appointed to supervise the assets of the debtor. A bankruptcy proceeding can either be entered into voluntarily by a debtor or initiated by creditors.

After a bankruptcy liquidation proceeding is filed, creditors, for the most part, may not seek to collect their debts outside of the proceeding. The debtor is not allowed to transfer property that has been declared part of the estate subject to proceedings. Furthermore, certain pre-proceeding transfers of property, secured interests, and liens may be delayed or invalidated. Various provisions of the Bankruptcy Code also establish the priority of creditors' interests.

Under the new Bankruptcy Act of 2005, credit counseling may be required or other options may be required, Contact a Bankruptcy Lawyer to find out all your legal options and rights.

Bankruptcy Law Is A Federal Law. This Sheet Gives You Some General Information About What Happens In A Bankruptcy Case. The Information Here Is Not Complete. You May Need Legal Advice.

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