Chapter 7 Bankruptcy Definition
Chapter 7 bankruptcy is a legal proceeding initiated when a business cannot pay its debts and is going to liquidate the company.
Chapter 7 Bankruptcy Expanded Definition
Chapter 7 bankruptcy is one of three bankruptcy options for a small business. With Chapter 7 bankruptcy, a trustee sells your assets and pays down the debts owed to creditors. The business is then closed.
This type of bankruptcy is cheaper and easier for sole proprietorships than Chapter 11 and Chapter 13 bankruptcies.
Bankruptcy: Options for Small Business | Patriot Software
Last Updated By
Christan Neff | Apr 17, 2023