Bankruptcy laws explain the terms and conditions for various bankruptcy cases. If you are filing for bankruptcy, it is very important for you to be aware of the ins and outs of the associated bankruptcy laws. However, since these laws are very complex ones, it is always prudent to avail consulting services from an experienced and expert bankruptcy lawyer. Following are some of the important chapters describing the terms and conditions for the various bankruptcy cases as per the bankruptcy laws in the United States.
Chapter 7
Chapter 7 of the bankruptcy laws deals with the basic liquidation for individuals and businesses. The specific type of bankruptcy described in this chapter is also known as “Straight Bankruptcy” or just “Liquidation”. Following are some of the important points of Chapter 7 bankruptcy laws.
•The assets and properties as declared by the debtor are reviewed. A special trustee is appointed to do the job.
•Some of those assets may be sold off by the trustee in order to pay off the debts the debtors owe to various creditors.
•The bankruptcy laws vary from state to state and depending upon the state, the trustee may let the debtor keep some of their personal properties. The debtor may also be allowed to keep an interest in their home, but most likely, the debtor will not be able to hold ownership for all of the equity.
•However, the bankruptcy discharge will include most of the debts.
•In the last six months, if you have already filed and dismissed a chapter 7 bankruptcy petition, or if you have already been granted or denied bankruptcy in the last six years, you will be not be able to file for bankruptcy again.
•As per the new bankruptcy laws, there are certain income restrictions as well. Therefore, do consult with your bankruptcy lawyer before you file a petition.
Chapter 11
The chapter 11 of the bankruptcy laws deals with the rehabilitation or reorganization bankruptcy cases. It is available for both business and individual debtors, but because of the complexity of the laws in this chapter, individuals prefer to stay away from the same. Chapter 11 has been the favorites of the business debtors because it allows them some room to continue with their existing venture while paying off the debts partially and in an orderly manner.
Chapter 13
This chapter is very much similar to the chapter 11 of the bankruptcy laws. It also allows the business to continue with their operations while paying off the debts partially and in an orderly manner. The only addition is that the debtor will also be proposed a repayment plan for the debts and they are supposed to act accordingly. In most cases, the court appoints a trustee that takes care of the repayment actions of the debtors. The debtor may also be legally obliged to pay certain amount as trustee’s fee. However, there are certain restrictions to be eligible to use Chapter 13 Bankruptcy Law. For example, if your debts exceed certain limits, you will not be able to file for bankruptcy as per chapter 13. This limit varies from state to state. So do consult with your bankruptcy lawyers whether you qualify or not.
Chapter 12
The chapter 12 of the bankruptcy lawyers is very much similar to chapter 13. The only difference is that where chapter 13 is used by businesses or individuals with regular source of income, chapter 12 is primarily used by family farmers and fishermen.
Chapter 15
If an individual or business is engaged in some international operations, and they want to file for bankruptcy, they are supposed to use chapter 15 of the Bankruptcy Laws.