What is the difference between chapters?
While Chapter 7 "Fresh Start" & 13 "re-organization for wage earners" are the
most common bankruptcy chapters, here is information on all chapter.
Chapter 7 is designed for individuals, corporations and partnerships in financial
difficulty who do not have the ability to pay their existing debts. Under chapter 7 a
trustee takes possession of all the debtor's non-exempt property, liquidates it for cash
and uses the proceeds to pay creditors according to priorities of the Bankruptcy Code.
Chapter 9 is designed to allow a municipality to continue operating while it works out
a repayment plan for its creditors. A municipal unit cannot liquidate its assets to satisfy
its debts.
Chapter 11 allows a business to reorganize and restructure its finances so that it may
continue to operate, provide employees with jobs, pay its creditors, and produce a
return for its stockholders, if any. While chapter 11 is primarily designed for a business
it is also available to individuals. In a chapter 11 case the debtor proposes a plan to
creditors which, if accepted by the creditors and approved by the court, will allow a
debtor to reorganize. A debtor may also propose a plan of liquidation and cease doing
business.
Chapter 12 allows family farmers and fishermen with financial difficulties to repay
debts over a period of time from future earnings. In many ways it is similar to a chapter
13 case. The eligibility requirements are restrictive, limiting its use to those whose
income arises primarily from a family-owned farm.
Chapter 13 enables individuals with regular incomes, under court supervision and
protection, to repay their debts over an extended period of time according to a plan.
The plan may call for full or partial repayment.
Chapter 15 expands the scope of bankruptcy law to deal with cases of cross-border
insolvency. It provides for cooperation between U.S. courts, trustees and debtors and
their foreign counterparts. Chapter 15 prescribes guidelines for access of foreign
representatives and creditors to Federal and State courts; the recognition of a foreign
proceeding, and relief.
most common bankruptcy chapters, here is information on all chapter.
Chapter 7 is designed for individuals, corporations and partnerships in financial
difficulty who do not have the ability to pay their existing debts. Under chapter 7 a
trustee takes possession of all the debtor's non-exempt property, liquidates it for cash
and uses the proceeds to pay creditors according to priorities of the Bankruptcy Code.
Chapter 9 is designed to allow a municipality to continue operating while it works out
a repayment plan for its creditors. A municipal unit cannot liquidate its assets to satisfy
its debts.
Chapter 11 allows a business to reorganize and restructure its finances so that it may
continue to operate, provide employees with jobs, pay its creditors, and produce a
return for its stockholders, if any. While chapter 11 is primarily designed for a business
it is also available to individuals. In a chapter 11 case the debtor proposes a plan to
creditors which, if accepted by the creditors and approved by the court, will allow a
debtor to reorganize. A debtor may also propose a plan of liquidation and cease doing
business.
Chapter 12 allows family farmers and fishermen with financial difficulties to repay
debts over a period of time from future earnings. In many ways it is similar to a chapter
13 case. The eligibility requirements are restrictive, limiting its use to those whose
income arises primarily from a family-owned farm.
Chapter 13 enables individuals with regular incomes, under court supervision and
protection, to repay their debts over an extended period of time according to a plan.
The plan may call for full or partial repayment.
Chapter 15 expands the scope of bankruptcy law to deal with cases of cross-border
insolvency. It provides for cooperation between U.S. courts, trustees and debtors and
their foreign counterparts. Chapter 15 prescribes guidelines for access of foreign
representatives and creditors to Federal and State courts; the recognition of a foreign
proceeding, and relief.
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