Chapter 7 Bankruptcy is oftentimes referred to as liquidation because it requires those who file to surrender their non-exempt assets, with the proceeds distributed to creditors.  Because liquidation can create problems for many businesses, it is most times a good idea for businesses to consider Chapter 11 before Chapter 7.  This is particularly true for businesses that wish to remain in operation.  However, sometimes businesses have accumulated too much debt to remain solvent.  When this is the case, Chapter 7 may be their best option.

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