As far as a personal Chapter 7, you are not required to notify your creditors before you file. When you file for a Chapter 7 bankruptcy, one of the many documents you will be required to submit to the court will be a creditor matrix. This matrix is a list of all the creditors you owe money. The bankruptcy court will then notify all of your creditors on the list that you filed for bankruptcy, and from the date you filed until your discharge, you will be under the protection of the automatic stay. The automatic stay is a shield that protects the debtor from any further creditor collections, which includes invoices, collection letters, calls, etc.
A meeting of creditors (called the 341 hearing) will be scheduled about a month or so after you file. This 341 hearing will be administered by the trustee assigned to your case. The purpose of this hearing is so if any of your creditors want to speak up, this is their chance. Typically, creditors do not show up or attend, but every case is different.
You will also want to make sure you can qualify for a Chapter 7 bankruptcy so you might want to gather up all your bills, creditors, income statements, and speak to an attorney. Part of your filing Chapter 7 will also include submitting a means test. If you do not qualify, the trustee will want to convert you to a Chapter 13, or dismiss your case. Chapter 7 is a little harder to qualify for since the BK laws changed, so that is why you should speak to an attorney so he/she can tell you if you will meet the requirements of a Chapter 7.
As far as closing your business, it is up to you. It might be in your best interest to close it before you file, this way you can show your financial devastation. Again, talk to an attorney as he/she will know the best strategy. The trustee will be looking at your business very closely to determine what assets can be liquidated, as well as the sale and liquidation of whatever is left of that business, so get advice from an attorney.
I have seen instances where a trustee will move in court to force the sale even though a debtor wants to still make the business work. It does not sound like you want to make the business work, but you also want to make sure that the trustee does not think you were pulling a fast one. All your statements, taxes, bank accounts, savings, etc. will be looked at close, and depending on the trustee, they will go back 3 to 5 years.
As far as allowing 90-180 days for creditors to file claims, that is left up to the trustee handling your case. If the trustee can recover some assets to liquidate, he/she will request and file for a claims bar date.
The notice sent out to your creditors with forms reads something like this:
NOTICE IS HEREBY GIVEN THAT:
1. All Creditors of the above−named estate are required to file their claim pursuant to Bankruptcy Rule 3002(c) (5) on or before (date set by trustee) in order to participate in the distribution of funds available. Any creditor who has previously filed a claim need not file again. Please be advised that filing a claim does not guarantee that you will receive payment on that claim. Whether you receive payment and the amount of any payment depends upon the amount of funds in the estate and whether there are administrative costs and priority claims to be paid.
2. For governmental units, a proof of claim must be filed by the aforementioned deadline or 180 days after the date of the order for relief in this case, whichever is later.
3. The proof of claim form is enclosed with this notice. It may be filed by regular mail with the court at the address below. If you wish to receive proof of its receipt by the Bankruptcy Court, enclose a copy of the proof of claim together with a stamped, self−addressed envelope.
4. YOU ARE FURTHER NOTIFIED THAT if a distribution is to be declared for creditors, it will not be made until conclusion of the administration of this estate by the trustee. At a later date, you will be given notice of the trustee's final account and report and the proposed distribution.
Keep this in mind….when you file for bankruptcy, you are essentially throwing down the gauntlet because you have no other options. Do not worry about notifying in advance, or trying to be the nice guy as you will not be afforded the same luxury. Let you attorney absorb the stress, and focus on rebuilding and getting a fresh start.
Good luck to you
