Chapter 7 bankruptcy allows a company to liquidate its assets upon deciding that it is not capable of paying the debt it has accrued. Once the company's assets have been sold and the funds have been distributed to creditors, it is free from liability. Chapter 7 bankruptcy is also known as straight bankruptcy.

Chapter 7 bankruptcy The most familiar type of bankruptcy, in which many or all of your debts are wiped out completely in exchange for giving up your non-exempt property.

Chapter 7 bankruptcy takes from three to six months, costs about $200, and commonly requires only one trip to the courthouse.