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What is chapter 7 bankruptcy?

Chapter 7 bankruptcy is also referred to as liquidation. Chapter 7 permits both voluntary and involuntary petitions. Under chapter 7 liquidations, a trustee will generally be appointed to act on behalf of the debtor, and when the time comes, will be the fiduciary that is responsible for collecting and liquidating the assets. The proceeds from the sale of assets will be used to payoff creditors.

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