Chapter 7 bankruptcy

A type of bankruptcy in which a business sells its remaining assets, shuts its doors, and goes out of business. There is no attempt to reorganize in order to pay some of the debts and remain in business. A court-appointed interim trustee is given discretion to make management changes, arrange unsecured financing, and wind down the business. Individuals can also file for Chapter 7 bankruptcy. See also Chapter 11 bankruptcy, Chapter 13 bankruptcy.