Corporations, partnerships, and sole proprietorships. Individual can also use this Chapter 7. Please refer to Individual Bankruptcy.
How it works?
Chapter 7 provides for "liquidation" - the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.
A trustee takes over the assets of the debtor's estate, reduces them to cash, and makes distributions to creditors, subject to the debtor's right to retain certain exempt property and the rights of secured creditors.
The business is not likely to continue its operations after the bankruptcy has concluded.
