Under Chapter(s) ____ of the bankruptcy laws, a company's assets are sold off and the proceeds are distributed to the creditors.

Question

Quizplus · Accepted Answer

Chapter 7 of the bankruptcy laws, also known as liquidation bankruptcy, involves selling off a debtor’s nonexempt assets to settle outstanding debts with creditors. Chapter 11 bankruptcy, on the other hand, is a reorganization process that allows a debtor to keep their assets and come up with a repayment plan. Therefore, the correct choice is B as only Chapter 7 involves the liquidation of a company's assets to pay creditors.

Under Chapter(s) ____ of the Bankruptcy Laws, a Company's Assets