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 ?
While a Chapter 7 bankruptcy offers more financial relief, it has become more difficult to qualify under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005.
Should you decide to convert from a Chapter 13 to a Chapter 7 bankruptcy, the process varies depending on the bankruptcy court, says David Haynes, a California bankruptcy attorney.
Creditors must have received as much as they would have gained through a Chapter 7 bankruptcy, and a Chapter 13 modification must be shown to be impossible.
A Chapter 7 bankruptcy remains on your credit report for 10 years from the filing date while a Chapter 13 bankruptcy stays on for seven years from the discharge date.
3) Certain government claims for taxes, interest and penalties survive a Chapter 7 bankruptcy but are discharged in a Chapter 13 bankruptcy.
Certain government priority tax claims survive either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.
21) After a Chapter 7 bankruptcy estate is closed, the IRS can still proceed against the taxpayer for tax not discharged due to fraud, failure to file or delinquent filing.
A Chapter 13 plan is a payment plan that includes postbankruptcy filing date (postpetition) income earned, while a Chapter 7 bankruptcy is a liquidation process.
23) Thus, a successful Chapter 13 plan may discharge taxes due on unfiled returns, delinquent returns, fraudulent returns or tax penalties, none of which are discharged under a Chapter 7 bankruptcy.
28) The Chapter 13 filing also suspends the periods for calculating the nondischargeable tax debts and late filed returns, should the debtor convert the Chapter 13 bankruptcy to a Chapter 7 bankruptcy liquidation.
Chapter 7 Bankruptcy -- Additional Exceptions to Discharge
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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