when a corporation goes bankrupt either voluntarily or involuntarily there is a specific series of events that occur for all stakeholders to receive due payments this begins with distributing assets to secured creditors who have collateral on loan to the business 
if they cannot fetch a market price for the collateral which has likely depreciated over time secured creditors can recoup some of the balance from the company s remaining liquid assets secured creditors are followed by unsecured creditors those who have loaned funds to the company i e bondholders employees who are owed unpaid wages and the government if taxes are owed preferred and common shareholders in that order receive any outstanding assets if any remain various types of bankruptcy that a corporation can declare include chapter 7 bankruptcy which involves liquidation of assets chapter 11 which deals with corporate reorganizations and chapter 13 which is debt repayment with lowered debt covenants or payment terms 1 of all the types of bankruptcy voluntary bankruptcy is the most common 