Bankruptcy Explained – Whats the Difference Between a Chapter 7 and a Chapter 11?
Before doing any research, you may believe that bankruptcy is simply the process people go through to get out of paying their financial obligations. Bankruptcy is actually very complicated, and neither option (Chapter 7 or Chapter 11) will allow an individual to get out of paying all of your debt! Chapter 7 bankruptcies are often referred to as the “liquidation” bankruptcy. Chapter 7 bankruptcies can be filed by individuals, partnerships, corporations or any other business entity. If an individual or company is filing Chapter 7, it’s because they are beyond the ability of reorganizing their debts and are forced to sell many of their assets in order to pay creditors. A trustee is appointed to the filer, and is responsible for ensuring that any assets that are secured and can be sold are sold – and that the proceeds from the sale are given to the specific creditor that secured the purchase in the first place. If the sale of secured assets result in more money than what is owed to the sec
