In Maryland, bankruptcy can provide consumers and businesses a solution for high volume debts. For companies, chapter 7 allows them to stop operating their business and eliminate debts through liquidation of company assets. For consumers, it is a way to pay off debts quickly without major repercussions. A Chapter 7 Bankruptcy Lawyer in New Market explains all the requirements and benefits of this chapter of bankruptcy.
Assessing the Value of Assets
The first step for the bankruptcy court is to assess the value of the assets. The total value of the assets presents the projected proceeds obtainable through chapter 7 bankruptcy. The court compares the projected proceeds to the total value of the debts accumulated by the consumer or the business.
Assigning a Trustee
The court assigns a trustee to the claimant’s case. The trustee is responsible for managing the sale of all assets through liquidation. The trustee must ensure that the claimant follows all rules that apply to their bankruptcy claim. This includes a complete shutdown of a company once the claim is approved. The trustee must report any form of non-compliance with bankruptcy laws.
Starting the Sales
The trustee starts all sales of the assets according to the plan set up for the chapter 7 bankruptcy. This includes any short sales for real property, auctions, and private sales to investors. The trustee is the liaison between the claimant and the potential buyer. All contracts for these sales are managed entirely by the trustee.
Distribution of Payments to Creditors
The trustee distributes the payments to all creditors as proceeds are obtained. Once the creditor is paid, the account is closed, and a request to remove the listing from the claimant’s credit report is made. While the bankruptcy itself remains on their credit report for up to ten years, it doesn’t entitle the creditor to a listing.
In Maryland, the liquidation process allows consumers and businesses to settle their debts within a six-month period. It also provides them with protection under an automatic stay. Claimants who need assistance from a Chapter 7 Bankruptcy Lawyer in New Market can schedule a consultation today.