Chapter 7
Chapter 7
Chapter 7 refers to a section of the U.S. Bankruptcy Code that defines a type of court protection for insolvent individuals or entities. In Chapter 7 bankruptcy filings, the insolvent entity's property is sold off, and the proceeds are used to pay creditors. When the insolvent entity is a company, the secured creditors are paid first, followed by unsecured creditors and, lastly, investors.
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