Bankruptcy Law

March 30, 2008

Once a debtor is granted bankruptcy under the Chapter 7 bankruptcy, a trustee is appointed by the bankruptcy court. The trustee then arranges to sell off all the assets, as declared by the debtor. The money thus collected is used to pay off the debts owed to various creditors based on the priority level, if any. This way, we can see that the chapter 7 bankruptcy is the worst kind of bankruptcy. The debtor gets no chance to continue with their business operations. All their assets are sold off, except for the exempted assets as applicable as per the specific bankruptcy laws of that particular state.
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