Asked by Subash Dahal on May 28, 2024
Verified
A(n) ______ is a proceeding under Chapter 7 in which a debtor states his or her debts and turns all assets over to a trustee, who sells the nonexempt assets and distributes the proceeds to creditors.
A) bankruptcy
B) reorganization
C) liquidation
D) adjustment
Liquidation
The process of winding up a company's financial affairs by selling off assets to pay creditors and distributing any remaining assets to the shareholders.
Chapter 7
A chapter of the U.S. Bankruptcy Code that deals with the process of liquidation, where a debtor's non-exempt assets are sold off to pay creditors.
Nonexempt Assets
Assets that can be seized in a bankruptcy proceeding because they are not protected by exemption laws.
- Recognize the process and implications of liquidation under Chapter 7.
Verified Answer
CB
Charlene BenbowJun 03, 2024
Final Answer :
C
Explanation :
A liquidation under Chapter 7 involves a debtor declaring their debts and handing over their assets to a trustee, who then sells the nonexempt assets to pay off creditors. This process is specifically designed to liquidate the debtor's assets to satisfy debts.
Learning Objectives
- Recognize the process and implications of liquidation under Chapter 7.