What is the difference between Chapter 7 and Chapter 11 bankruptcy?

Chapter 7 bankruptcy, also known as liquidation bankruptcy, is designed for individuals and businesses with limited assets and income who are unable to repay their debts. Under Chapter 7, a trustee is appointed to liquidate the debtor’s non-exempt assets and distribute the proceeds to creditors. Most unsecured debts, such as credit card debt and medical bills, are discharged in a Chapter 7 bankruptcy, which means the debtor is no longer responsible for paying them.

Chapter 11 bankruptcy, on the other hand, is a type of reorganization bankruptcy primarily intended for businesses but can be used by individuals as well. It allows the debtor to restructure their debts and operations under court supervision while continuing to operate their business. This allows the debtor to continue earning income and paying creditors over time, rather than having to liquidate assets immediately. Chapter 11 is a more complex and expensive process than Chapter 7, and it requires the debtor to submit a reorganization plan to the court for approval.

In summary, Chapter 7 bankruptcy is for individuals and businesses who need to liquidate assets to repay creditors, while Chapter 11 bankruptcy is for businesses and individuals who want to reorganize their debts and operations under court supervision while continuing to operate their business.

Learn about Inflation Rate’s impact on your Organization’s Receivables:

Inflation can have a significant impact on a company’s accounts receivables, which are the amounts owed to the company by its customers for goods or services that have been delivered but not yet paid for.
The impact of inflation on accounts receivables depends on the terms of the sale agreement between the company and its customers. If the company has contracts with fixed prices, inflation can erode the value of the receivables over time. For example, if a company sold goods for $1,000 with payment due in 60 days and inflation is 5% per year, the value of the receivable in today’s dollars would be reduced to $952.38 after one year.
On the other hand, if the company has contracts with variable prices, such as contracts that include inflation-adjustment clauses, the impact of inflation on accounts receivables may be mitigated. In this case, the price of the goods or services sold would be adjusted for inflation, which would help to maintain the real value of the receivables.
In summary, inflation can impact a company’s accounts receivables by reducing the real value of fixed-price receivables over time, while variable-price receivables with inflation-adjustment clauses may be less affected by inflation.

The Shelf Life of a Receivable

We are entering a crucial stage of the year for corporate debt collections.  Some organizations are closing their year at the end of June and pushing for cash.  Collecting your over 90 aged receivables is vital as your organization is looking to meet year-end cash collection targets.

Global Hawk Resources is strictly measured on how much we collect and pass back to our customers minus cents on the dollar.  Your organization needs cash on hand to meet financial obligations and we are here to execute that process.  Creating an escalation workflow from both an internal and external standpoint cannot be overstated. Utilizing collection tools and analyzing weekly aging reports will highlight problem areas in your AR that need to be addressed and resolved.  It is a critical time of year to clean up your over 90 aged balances and we are here as a resource.

Contact us today to learn more to learn about Global Hawk Resources services and to request a free demo.

Closing the Gap Between Failure and Success

Meet Our Team!

Nick has an extensive background in the order to cash flow of a business, development and creating programs to assist companies in meeting their cash collection goals. A 2003 graduate of Isenberg School of Mgmt @ UMassAmherst where he received a B.S. in Business.