What is the difference between Chapter 7 vs Chapter 11?

What is the Difference Between Chapter 11 vs Chapter 7 Bankruptcy? If filing for bankruptcy protection has become necessary, Chapter 11 grants the company an opportunity to restructure its debts and continue operating, whereas Chapter 7 is the straight liquidation and distribution of the sale proceeds of a company to its creditors.

What is Chapter 7 vs 11?

Under Chapter 7, a firm must liquidate and sell all of its assets in an auction. Under Chapter 11, managers can negotiate with creditors to decide whether to reorganize the firm or liquidate some or all of its assets.

Why file Chapter 7 bankruptcy?

The goal of Chapter 7 bankruptcy is to give you a new start. The elimination of certain debt frees you from personal liability for the discharged debt. However, some types of debt are not dischargeable, including student loans (unless the court rules otherwise), child support and alimony, certain taxes, and debts incurred by fraud.