BANKRUPTCY

WHAT IS BANKRUPTCY?

Bankruptcy may well be the shelter from the financial storm you are looking for. Bankruptcy is a federal legal proceeding that affords relief to the honest debtor (person or business enterprise) facing serious financial obstacles. A person or business files bankruptcy in order to obtain some form of financial relief – either by way of discharge (debt forgiveness) or financial restructuring.

WHAT ARE THE DIFFERENT TYPES OF BANKRUPTCY?

The Bankruptcy Code is comprised of several chapters. Each chapter of the Bankruptcy Code after chapter 5, addresses a different type of bankruptcy. As such there are presently 6 different types of bankruptcy: Chapter 7(liquidation or straight bankruptcy), Chapter 9 (municipality bankruptcy), Chapter 11 (business reorganization), Chapter 12 (family farmer reorganization), Chapter 13 (wage earner reorganization), and Chapter 15 (cross-border bankruptcy). As you can likely guess, the most common bankruptcies are Chapter 7, Chapter 11, and Chapter 13.

CHAPTER 7

While a vast majority of Chapter 11 bankruptcy cases are filed by business enterprises (sole proprietorships, farmers, ranchers, partnerships, limited liability companies, and corporations) an individual wage earner may also file for relief under Chapter 11 (individual wage earners will usually file Chapter 11 where they do not qualify for Chapter 13). The primary objective of Chapter 11 is to allow the Debtor to continue operating a business while reorganizing its finances. The basic rule is that the debtor may continue to operate the business enterprise and manage its property in the ordinary course of business as a “debtor in possession.” The Debtor in Possession, in the ordinary course of events, retains management control and has certain additional powers not otherwise available. For example, a Debtor in Possession is able to reject executor contracts (leases) and recover certain pre-petition transfers.

While a vast majority of Chapter 11 bankruptcy cases are filed by business enterprises (sole proprietorships, farmers, ranchers, partnerships, limited liability companies, and corporations) an individual wage earner may also file for relief under Chapter 11 (individual wage earners will usually file Chapter 11 where they do not qualify for Chapter 13). The primary objective of Chapter 11 is to allow the Debtor to continue operating a business while reorganizing its finances. The basic rule is that the debtor may continue to operate the business enterprise and manage its property in the ordinary course of business as a “debtor in possession.” The Debtor in Possession, in the ordinary course of events, retains management control and has certain additional powers not otherwise available. For example, a Debtor in Possession is able to reject executor contracts (leases) and recover certain pre-petition transfers.

While a vast majority of Chapter 11 bankruptcy cases are filed by business enterprises (sole proprietorships, farmers, ranchers, partnerships, limited liability companies, and corporations) an individual wage earner may also file for relief under Chapter 11 (individual wage earners will usually file Chapter 11 where they do not qualify for Chapter 13). The primary objective of Chapter 11 is to allow the Debtor to continue operating a business while reorganizing its finances. The basic rule is that the debtor may continue to operate the business enterprise and manage its property in the ordinary course of business as a “debtor in possession.” The Debtor in Possession, in the ordinary course of events, retains management control and has certain additional powers not otherwise available. For example, a Debtor in Possession is able to reject executor contracts (leases) and recover certain pre-petition transfers.

CHAPTER 13

While a vast majority of Chapter 11 bankruptcy cases are filed by business enterprises (sole proprietorships, farmers, ranchers, partnerships, limited liability companies, and corporations) an individual wage earner may also file for relief under Chapter 11 (individual wage earners will usually file Chapter 11 where they do not qualify for Chapter 13). The primary objective of Chapter 11 is to allow the Debtor to continue operating a business while reorganizing its finances. The basic rule is that the debtor may continue to operate the business enterprise and manage its property in the ordinary course of business as a “debtor in possession.” The Debtor in Possession, in the ordinary course of events, retains management control and has certain additional powers not otherwise available. For example, a Debtor in Possession is able to reject executor contracts (leases) and recover certain pre-petition transfers.

While a vast majority of Chapter 11 bankruptcy cases are filed by business enterprises (sole proprietorships, farmers, ranchers, partnerships, limited liability companies, and corporations) an individual wage earner may also file for relief under Chapter 11 (individual wage earners will usually file Chapter 11 where they do not qualify for Chapter 13). The primary objective of Chapter 11 is to allow the Debtor to continue operating a business while reorganizing its finances. The basic rule is that the debtor may continue to operate the business enterprise and manage its property in the ordinary course of business as a “debtor in possession.” The Debtor in Possession, in the ordinary course of events, retains management control and has certain additional powers not otherwise available. For example, a Debtor in Possession is able to reject executor contracts (leases) and recover certain pre-petition transfers.

CHAPTER 11

While a vast majority of Chapter 11 bankruptcy cases are filed by business enterprises (sole proprietorships, farmers, ranchers, partnerships, limited liability companies, and corporations) an individual wage earner may also file for relief under Chapter 11 (individual wage earners will usually file Chapter 11 where they do not qualify for Chapter 13). The primary objective of Chapter 11 is to allow the Debtor to continue operating a business while reorganizing its finances. The basic rule is that the debtor may continue to operate the business enterprise and manage its property in the ordinary course of business as a “debtor in possession.” The Debtor in Possession, in the ordinary course of events, retains management control and has certain additional powers not otherwise available. For example, a Debtor in Possession is able to reject executor contracts (leases) and recover certain pre-petition transfers.

While a vast majority of Chapter 11 bankruptcy cases are filed by business enterprises (sole proprietorships, farmers, ranchers, partnerships, limited liability companies, and corporations) an individual wage earner may also file for relief under Chapter 11 (individual wage earners will usually file Chapter 11 where they do not qualify for Chapter 13). The primary objective of Chapter 11 is to allow the Debtor to continue operating a business while reorganizing its finances. The basic rule is that the debtor may continue to operate the business enterprise and manage its property in the ordinary course of business as a “debtor in possession.” The Debtor in Possession, in the ordinary course of events, retains management control and has certain additional powers not otherwise available. For example, a Debtor in Possession is able to reject executor contracts (leases) and recover certain pre-petition transfers.

SUBCHAPTER V OF CHAPTER 11

While a vast majority of Chapter 11 bankruptcy cases are filed by business enterprises (sole proprietorships, farmers, ranchers, partnerships, limited liability companies, and corporations) an individual wage earner may also file for relief under Chapter 11 (individual wage earners will usually file Chapter 11 where they do not qualify for Chapter 13). The primary objective of Chapter 11 is to allow the Debtor to continue operating a business while reorganizing its finances. The basic rule is that the debtor may continue to operate the business enterprise and manage its property in the ordinary course of business as a “debtor in possession.” The Debtor in Possession, in the ordinary course of events, retains management control and has certain additional powers not otherwise available. For example, a Debtor in Possession is able to reject executor contracts (leases) and recover certain pre-petition transfers.