Bankruptcy Law

Business might use Chapter 7 or Chapter 11.

Chapter 7 features:

• Liquidation bankruptcy-liquidates and dissolves a company. 
• It is generally a more quick and simple process when compared to other chapters;
• Only one court visit is required in order to file the petition for bankruptcy;
• Some of the debtor’s property must be sold in order to pay off creditors as much as possible;
• A court appointed trustee is required to manage the bankruptcy; and
• The business is not likely to continue its operations after the bankruptcy has concluded.

Chapter 11 features:

• The business is likely to continue its operations once the bankruptcy has concluded;
• There is no need to sell off property in order to repay the creditors;
• No court appointed trustee is necessary due to the fact that business will continue operating;
• The process is longer and more complex than other chapters, such as a Chapter 7 bankruptcy; and
• All debts must eventually be paid.