Chapter 7 Bankruptcy
A form of bankruptcy involving the liquidation of a debtor's non-exempt assets to pay creditors, typically resulting in most remaining eligible debts being discharged.
For a business, Chapter 7 generally means the business winds down, with a court-appointed trustee liquidating assets to repay creditors according to legal priority, after which the business entity typically ceases operating.
A past Chapter 7 filing, whether personal or business, is something lenders review during underwriting, and its impact on future financing eligibility depends heavily on how much time has passed and the specific lender’s policies.
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