CHAPTER 7 BANKRUPTCY
If a business files for a Chapter 7 bankruptcy then a Trustee is appointed to look into the business’s financial affairs. They will liquidate any assets and distribute the proceeds to the creditors. The business entity will be dissolved.
If individual files for a Chapter 7 bankruptcy they are allowed to keep the certain exempt property. The appointed Trustee will liquidate other assets to pay the creditors and many (but not all) debts are discharged. The exact exemptions vary from state to state and can include cash, a family car and property. Most people who file for Chapter 7 bankruptcy keep all their assets and move on with a fresh start in life.