Chapter 7 Bankruptcy

Chapter 7 is the most common form of bankruptcy in America. Chapter 7 is a process of liquidation as opposed to reorganization. Both business and individuals can file for Chapter 7 bankruptcy. If a company files for chapter 7 it must cease operations. A trustee will be immediately appointed. It doesn't necessarily mean that the entire company will cease to exist. Parts of the company can be sold off leaving other divisions of the company free to do business.

If a person files for chapter 7 bankruptcy there are items that they can keep through an exemption. The majority of liens will remain. Assets are liquidated. Unsecured debt is discharged under this plan. There are some debts that will not be discharged. If you owe income taxes, student loans and child support you must continue to pay these. A discharge will stay on your credit report for 10 years.