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Bankruptcy Law

Bankruptcy Law introduction and resources

Overview

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.

Resources