Liquidation in bankruptcy is handled under which section of the Bankruptcy Code?

Liquidation in bankruptcy is primarily governed by Chapter 7 of the Bankruptcy Code. This chapter is designed for individuals or businesses that need to eliminate their debts by liquidating their non-exempt assets. Under Chapter 7, a bankruptcy trustee is appointed to oversee the process, which involves selling the debtor's assets to repay creditors.

This liquidation process is focused on providing a fresh start for the debtor, with the goal of discharging most unsecured debts, such as credit card debts and medical bills, allowing individuals or businesses to move forward financially. The trustee manages the sale of the assets, distributing the proceeds to creditors according to the priority established in the bankruptcy laws.

In contrast, the other chapters mentioned serve different purposes: Chapter 11 involves reorganization of debts for businesses, Chapter 13 allows individuals to reorganize and repay their debts over time, and Chapter 15 deals with cross-border insolvency cases. Each of these chapters has distinct processes and goals, making Chapter 7 specifically tailored for liquidation scenarios.