CHAPTER 9 - § 9.2 • TYPES OF BANKRUPTCY CASES

• Jurisdiction: Colorado

§ 9.2 • TYPES OF BANKRUPTCY CASES

§ 9.2.1—Liquidation — Chapter 7

Chapter 7 is often referred to as the "straight liquidation" chapter. A chapter 7 trustee is always appointed by the United States Trustee's office, although in certain instances, creditors may elect to vote for a candidate for chapter 7 trustee. 11 U.S.C. § 702. The purposes of a chapter 7 bankruptcy case are to (1) collect all property of the estate, (2) liquidate the property of the estate, and (3) distribute the proceeds to creditors.

§ 9.2.2—Rehabilitation — Chapters 9, 11, 12, and 13

In chapters 9, 11, 12, and 13, the debtor remains in possession of the property of the bankruptcy estate and may continue to use the property in the ordinary course of business. In addition, the debtor files a plan pursuant to which at least some payment is made to the unsecured creditors.

Chapter 9 is for municipalities. State law governs whether a municipality can file a bankruptcy petition. Chapter...