How Cases Move Through Federal Courts
Chapter 7 Bankruptcy Cases
Liquidation of assets
If the debtor has property or other assets, the case trustee must sell them in a way that maximizes the cash available to creditors. If the debtor is a business, the case trustee shuts the business down and sells everything the debtor owns as quickly as possible and usually at drastically reduced prices. If the debtor is a department store, for example, the liquidation sale includes all the merchandise and even the shelves, racks, and cash registers. Property may also be sold at auction or in private transactions. The case trustee also pursues legal claims the debtor has against others. The goal is to get as much money as possible for the bankruptcy estate, and thus for the creditors.