Author Question: When a business is declared bankrupt, what steps are taken to pay the business' ... (Read 89 times)

TFauchery · **on:** Jun 24, 2018

When a business is declared bankrupt, what steps are taken to pay the business' debts?

Question 2

What are the three categories typically found on a balance sheet?

mmj22343 · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

The court appoints a trustee to sell all the assets. The proceeds from the assets first go to pay the legal costs of the bankruptcy. They also go to any claims that the law says must be paid first and to any secured creditors, such as a bank holding a mortgage. Any money left over goes to all other creditors in proportion to their claims.

Answer to Question 2

assets, liabilities, equity