Chapter 7

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Chapter 7

In the United States, a type of bankruptcy where a person's or company's assets are required to be liquidated. The court appoints a trustee, who may or may not be a part of the company, to oversee the liquidation process. If a company files for chapter 7, it ceases operations. The company's creditors receive the proceeds from liquidation according to the system of absolute priority; that is, secured creditors are paid first, then if anything is left unsecured creditors are paid, then preferred stockholders, and finally common stockholders. A company files for chapter 7 proceedings when its management believes that reorganizing according to a court-mandated plan would not result in the company becoming profitable.

Chapter 7

A bankruptcy option in which a bankrupt firm is liquidated after the courts have determined that reorganization is not worthwhile. A trustee is charged with liquidating all assets and distributing the proceeds to satisfy claims in their order of priority. In Chapter 7 bankruptcies the creditors often receive a fraction of the value of their claims and the stockholders receive nothing.
References in periodicals archive ?
A Chapter 7 bankruptcy is a liquidation of non-exempt assets, says William E.
The bill is drawing attention because it has the potential to clamp down on the ease of filing for Chapter 7 bankruptcy.
In a chapter 7 bankruptcy proceeding, the Fifth Circuit in In re West Texas Marketing, 54 F3d 1194 (1995), reached a similar decision that unsecured interest was not deductible under Bkr.
Is a trustee of a Chapter 7 bankruptcy estate entitled to deduct expenses of administering the estate "above the line," as a deduction from gross income under Sec.
The new bankruptcy act taking effect October 17th will make it substantially harder for individuals to qualify for bankruptcy protection under a Chapter 7 bankruptcy, opening the door to creditors to adopt more aggressive negotiations and collect more debt in the next two weeks, according to Nick Iezza, attorney with Spiwak & Iezza (www.
In Chapter 7 bankruptcy cases, the election is valid only with the written consent of the bankruptcy trustee.
Through the use of a "means test," the Trustee or any creditor can now bring a motion to dismiss a Chapter 7 bankruptcy if the debtor's income is greater than the state median income.
However, haphazard results will occur unless the tax practitioner knows whether a Chapter 13 or a Chapter 7 bankruptcy is suitable for his client.
The law makes it more difficult for filers to qualify for Chapter 7 bankruptcy, leaving repayment plans under Chapter 13 as their only option.
Congress recently passed sweeping changes to the Bankruptcy Code, designed to restrict the availability of a discharge in Chapter 7 bankruptcy and substantially reduce the relief available in Chapter 13 bankruptcy.
Based on the resolutions adopted, XCL-China is (1) authorized and directed to withdraw its opposition to the involuntary Chapter 7 bankruptcy proceeding currently pending in the United States Bankruptcy Court for the Western District of Louisiana in Opelousas; and (2) authorized and directed to convert the involuntary Chapter 7 proceeding to a voluntary Chapter 11 proceeding; and (3) to retain Douglas S.
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