Chapters of the US Bankruptcy Code Home

Fri, 18 Feb 2011 12:35:26 +0100

The ‘United States Constitution’ permits Bankruptcy Code in United States. This Bankruptcy Code comes under the Title 11 of Unite States Code. The Title 11 contains nine Bankruptcy Chapters in it. Out of these nine chapters, six of them offer the filing of an appeal. The other three chapters provide rules and regulations to direct those appeals.

Here we take these six chapters of filing Bankruptcy

This will provide you an easy understanding of the different chapters important for filing bankruptcy.

Chapter 7 Bankruptcy: Liquidation
Chapter 7 Bankruptcy is an opportunity for a debtor to come out of a financial emergency and provides a chance to get better financially. Under chapter 7 Bankruptcy, a trustee is appointed. This chapter 7 trustee sold the non-exempt property of the debtor. In addition, he distributes the profits between the creditors. In most of the cases where chapter 7 bankruptcy is brought into the debtor has no asset to loose.

Chapter 9 Bankruptcy: Reorganization for municipalities
Chapter 9 Bankruptcy is to help municipalities who are in financial trouble. These financial crises to municipalities happens because lack of proper financial management or the occurrence of natural calamity. This chapter provides protection to public. This is because if the municipality suffers financial crises this finally going to harm the public.

Chapter 11 Bankruptcy: Reorganization
Chapter 11 Bankruptcy helps business organizations to come out of their financial disasters. This allows companies to continue running while they are facing debt repayment plans. The corporations/sole partnership files chapter 11 Bankruptcy.

Chapter 12 Bankruptcy: Reorganization
Chapter 12 Bankruptcy, considered for “farmers” and “fishermen’s.” It is similar to chapter 13 bankruptcy in structure. It allows financially troubled family fishermen and farmers to pay their debts. Under this chapter debtor, made a choice to pay his debts to the creditors in installments over a period of three to five years.

Chapter 13 Bankruptcy: Reorganization
Chapter 13 Bankruptcy is not for every one. This is because, under chapter 13 bankruptcy debtor have to use their income to pay their debts.

Chapter 15 Bankruptcy: Cross-Border bankruptcy
Chapter 15 bankruptcy provides right to the corporate bankruptcy proceeding outside the United States. This also provides cooperation the United States court and foreign court.

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Chapters of the US Bankruptcy Code Home

Here we take these six chapters of filing Bankruptcy