Bankruptcy Chapters In The United StatesIn the United States there are six major types of bankruptcy as listed under the Bankruptcy Code that is found in Title 11 of the United States Code. These chapers are as follows: • Chapter 7 Chapters 7 and 13 are the most common types of personal bankruptcy for individuals in the United States. Chapter 7 Bankruptcy Chapter 7 bankruptcy is a liquidation style type of bankruptcy used by businesses or individuals. Chpater 7 is also known as liquidation bankruptcy or straight bankruptcy. In Chapter 7 bankruptcy debtors are generally allowed to protect and keep most of their personal and work related belongings, though sometimes property that is not paid in full may be returned to the trustee for sale, the proceeds of which go to the creditors. Chapter 13 Bankruptcy Chapter 13 bankruptcy is more of a reorganization plan for individuals than a liquidization. Under Chapter 13 bankruptcy the debtor makes regular payments to the trustee who in turn makes payments to the various creditors that are owed. Chapter 9 is a municipal type of bankruptcy. Chapter 11 Bankruptcy Chapter 11 bankruptcy is an option for businesses other than Chapter 7 bankruptcy. In Chapter 7 bankruptcy a business sells off all its assets and eventually ceases operation. With Chapter 11 bankruptcy, however, the business in question plans to reorganize their financial structure, pay off creditors and continue operating. Chapter 12 Bankruptcy Chapter 12 bankruptcy is a particular type of rehabilitation style bankruptcy that is for fisherman and family farmers only. Chapter 15 Bankruptcy Chapter 15 bankruptcy is specifically for cross-border bankruptcy cases, where assets or information are located in different jurisdictions. By entering into Chapter 15 bankruptcy, cases are handled by incorporated Model Law on Cross Border Insolvency acts drafted by the United Nations Commission on International Trade and Law.
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