Straight Liquidiation Law and Legal Definition

The term straight liquidation is used to describe a "Chapter 7" bankruptcy that is available to individuals, corporations and business partnerships. Accordingly, a Chapter 7 trustee, assigned by the U.S. Trustee's Office or chosen by the creditors, liquidates (sells) any assets that are not protected by the court (non-exempt assets) to pay all or a portion of the debts owed to creditors.