Residents of Arizona may have heard that GreatPricedFurniture.com, an online furniture retailer, has filed for Chapter 7 bankruptcy protection. Chapter 7 filings allow both people and business entities to file if they meet certain requirements. In the case of GreatPricedFurniture.com, the company's assets were a fraction of their debts, with their revenue decreasing since the previous year.
The company was plagued by unfortunate events after one of their manufacturers refused to complete its orders, and a substantial proportion of their orders were stranded in transit by the failure of a freight carrier. As a result, the company had to terminate its operations, despite being in debt to industry suppliers.
As per Chapter 7 proceedings, a trustee will be appointed to handle the claims by selling the assets of the company. When the process ends, the business will close its doors forever and cease to exist.
Unlike Chapter 7 bankruptcy for businesses, people who file for personal Chapter 7 bankruptcy protection will begin the process of rebuilding their lives, as it wipes out most of personal debts. There is an income requirement that must be met in order to become eligible to begin Chapter 7 proceedings.
Also known as liquidation bankruptcy, its biggest advantage is the discharge of practically all debts. Debtors can gain immediate protection from the harassment of creditors, wage garnishment and repossession when they file for Chapter 7 bankruptcy, as it puts an automatic hold on all such actions.
Chapter 7 bankruptcy provides debtors with a new beginning in difficult economic times. If someone is under financial pressure due to piling debt and is unaware of his or her options, it may helpful to consult an experienced bankruptcy attorney to discuss various possibilities for debt relief. An attorney can also alleviate some common concerns related to the possession of assets.
Source: Furniture Today, "Online retailer GreatPricedFurniture.com in Chapter 7 bankruptcy," Clint Engel, Feb. 22, 2012