Chapter 7 Bankruptcy
Chapter 7 bankruptcy is a process of liquidation of personal or business assets because the person or business cannot pay debts. Under Chapter 7, a trustee is appointed to oversee the sale of all business assets, which are distributed to creditors.
The Bankruptcy Process
- The process begins with a petition from the debtor. The petition includes financial statements and lists all creditors and the amounts of their claims.
- A trustee is appointed by the court.
- There are several meetings with the creditors to discuss their claims and attempt to work out agreement on the amounts each will receive.
- The trustee then liquidates all the business property and allocates the money to the creditors according to the priority debt claims determined by bankruptcy laws.
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