Chapter 7 bankruptcy law is also known as liquidation. It allows the debtor to pay off debts by selling of his assets and dividing the proceeds among his creditors. A special court officer known as a trustee in the is appointed. In the states of North Carolina and Alabama, he/she is known as the bankruptcy administrator. These two have the same responsibilities of monitoring the filed cases and supervising the activities of the debtor and the creditor

Cases under this chapter begin with the debtor filing a petition in court. They must also submit financial records to back up the need of filing a petition. These records include a current balance sheet, an income statement and a financial statement. They must also submit a summary of tax payment to the trustee.

The court, once a petition has been filed charges some fees. These fees are paid to the court clerk once the petition has been filed. However payment may be paid in not more than four installments and the full amount should be completed by the end of four months. These fees are meant for paying the trustee’s surcharge, miscellaneous court charges and also the filing fee. In cases where the debtor is not in a position to pay the fees even in installments, the court may decide to waive the charges completely.

Once the court charges have been fulfilled, one has to fill out a form. This bankruptcy form shows a list of creditors, the amount and frequency of the debtor income, a net amount of living expenses and assets that the debtor has. They are what determine the kind of ruling the jury will give.