Here are the 2 types of corporate bankruptcy under U.S. law.
- Chapter 11 bankruptcy, allows a company to continue to operate as it sheds debts and contracts it can not afford.
- Chapter 7 bankruptcy, the company goes out of business fairly rapidly as its assets are sold off to try to satisfy its creditors.
[ Via CNN Money FAQ ]
Five different kinds of bankruptcy cases cases are divided into two different types of bankruptcy cases:
- Liquidation – Chapter 7
- Reorganization – Chapters 9, 11, 12 and 13
According to investopedia
- Chapter 7 bankruptcy is called liquidation bankruptcy.
- Chapter 11 bankruptcy is called rehabilitation bankruptcy.
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