Introduction to Chapter 7
Originally published: October 2013
In the United States, federal bankruptcy law (Title 11) governs both of these situations. In this article we’ll cover the steps in the liquidation process. Next month, we’ll tackle reorganization.
Chapter 7 of Title 11 governs corporate liquidation – termination of the business and sale of its assets to repay creditors at least some portion of the debt incurred. In 2004, approximately 20,000 Chapter 7s were filed.