BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Chapter 7
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Chapter 11
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Chapter 13
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Detailed explanation-1: -Let’s understand each of them in detail. A person or an organisation files for Chapter 7 under the US bankruptcy law in which they liquidate their assets to repay their debt obligations. Filing Chapter 7 means that all collection efforts from all creditors should be stopped at once.
Detailed explanation-2: -Chapter 7 provides relief to debtors regardless of the amount of debts owed or whether a debtor is solvent or insolvent. A Chapter 7 Trustee is appointed to convert the debtor’s assets into cash for distribution among creditors.
Detailed explanation-3: -Chapter 7 is a “liquidation” bankruptcy that doesn’t require a repayment plan but does require you to sell some assets to pay creditors. Chapter 11 is a “reorganization” bankruptcy for businesses that allows them to maintain day-to-day operations while creating a plan to repay creditors.
Detailed explanation-4: -Chapter 7 of the Bankruptcy Code provides for liquidation bankruptcy proceedings. (2) In regard to corporations, the process by which corporate assets are converted into cash and distributed among creditors and shareholders according to specific rules of preference.