In a Chapter 11 bankruptcy, a firm voluntarily enters the procedure intending a reorganization under which it can continue in business. A Chapter 7 bankruptcy, on the other hand generally results in the firm's liquidation.

Question

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A Chapter 11 bankruptcy allows for the reorganization and continuation of the firm, while a Chapter 7 bankruptcy typically leads to liquidation of the firm.

In a Chapter 11 Bankruptcy, a Firm Voluntarily Enters the Procedure