What is a Chapter 7 business bankruptcy?
As with a consumer Chapter 7 bankruptcy, this option requires the liquidation of nonexempt assets, however, for individuals with primarily business related debt, the requisite qualifications are not nearly as stringent. Still, the individual with business related debt, may be able to claim certain property exempt and therefore retain such property after their case has closed. Nonexempt assets will however be liquidated by a trustee. For a corporation or other business entity, the filing of a Chapter 7 bankruptcy will conveniently and effectively allow the winding up of its affairs and orderly closure of the debtor’s business. Upon liquidation of the entity’s assets, the chapter 7 trustee will pay funds, if any, to the creditors. What is a Chapter 11 bankruptcy? A chapter 11 may be used by an individual with significant assets or a corporation or other entity that seeks to reorganize its finances. A chapter 11 bankruptcy gives the debtor breathing room and an opportunity to reorganize,