A Chapter 7 bankruptcy filing can be very beneficial for an in-debt party. Many Seattle residents have gone through bankruptcy; and though the initial stages may be a bit painful and trying, many people who go through bankruptcy enjoy prosperous lives after the filing is complete.
Chapter 7 filings are often referred to as liquidation. What this means is that the filer will have to document, in fine detail, what kind of assets he or she has, and what kind of debts he or she is burdened with. Once this documentation is in place, the courts will determine which of your debts can be discharged, and which of your assets will be liquidated to pay off some of your remaining debts.
The entire process can seem complicated. But approaching it with a professional demeanor while having an experienced legal representative by your side can see you through a Chapter 7 process; and, ultimately, to a better financial situation.
With that in mind, consider the Chapter 7 filing of CNET's founder, Halsey Minor. The 47-year-old sold CNET to CBS in 2008 -- a $1.8 billion sale that earned him roughly $200 million. In May, he filed for bankruptcy, listing $50 million in assets and $100 million in debts.
But that detailed Chapter 7 document we mentioned above? Minor failed to file it in time, resulting in the bankruptcy court that was handling his case to dismiss his filing.
That's not the end of the world; Minor can file again, as could anyone in that situation. But this is an example of how not to file for bankruptcy. You want to take everything seriously and report the necessary documents on time. Clerical errors can derail a bankruptcy filing, and you want to avoid that at all costs.
Source: Bloomberg, "CNET Founder's Bankruptcy Thrown Out Over Missed Deadline," Erik Larson and Dawn McCarty, June 13, 2013