Chapter 7
Definition
Chapter 7, a part of the U.S. Bankruptcy Code, deals with asset liquidation of a debtor company to repay creditors.
Benefits
Chapter 7 offers a fresh start for businesses overwhelmed by debt. It clears most debts and allows owners to move forward.
Frequently Asked Questions
What is Chapter 7 liquidation under the Bankruptcy Code? Chapter 7 liquidation is a process. It involves selling a company`s assets to pay back its debts under U.S. law.
How long does Chapter 7 stay on credit? Chapter 7 can stay on your credit report for 10 years. It affects your ability to get new credit during this time.
Can Chapter 7 fall off after 7 years? No, Chapter 7 stays on your credit report for 10 years, not 7. After 10 years, it should automatically be removed.
Summary
Chapter 7 is a way out for businesses struggling with debt. It involves selling assets to pay creditors, offering a chance to start anew.