An individual or corporation may seek relief in the form of Chapter 7 bankruptcy for a variety of reasons, such as the inability to service debt or repay its creditors. As opposed to Chapter 11 bankruptcy, which governs the reorganization of an entity in bankruptcy, Chapter 7 governs the process of liquidation. A trustee is immediately appointed to monitor and examine all financial affairs of the business in order to maximize the value of those assets for redistribution to the creditors. In small cases, a trustee can manage this process and bring closure in a short amount of time. Sometimes, in larger filings, the trustee may choose to involve a consultant or financial advisor to aid in the process and provide visibility to all the financial information a company may possess.

If you are contemplating filing for Chapter 7 bankruptcy protection, we suggest you immediately discuss your options with an insolvency attorney.