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Transcript of Bankruptcy
What are bankruptcy laws?
Bankruptcy laws help people who can no longer pay their creditors and allows them to get a fresh start
•By cashing in (liquidating) their assets to pay their debts
•By creating a repayment plan.
•Another advantage of chapter 13 is that it allows individuals to reschedule secured debts and extend them over the life of the chapter 13 plan which may lower the payments
•This is the chapter of the bankruptcy code providing for liquidation
The three main chapters of the bankruptcy code are:
•A chapter 13 bankruptcy enables individuals with regular income to develop a plan to repay all or part of their debts.
•This is the chapter of the Bankruptcy Code that provides for reorganization
•Usually involves a corporation or partnership
•A bankrupt company, might use Chapter 11 of the Bankruptcy Code to "reorganize" its business and try to become profitable again.
•A chapter 7 debtor will typically not appear in court and will not see the bankruptcy judge unless an objection is raised in the case
•If you want to eliminate unsecured debt like credit cards, payday loans, utility bills, medical debt and some personal loans, filing bankruptcy under Chapter 7 may be an option.
•Under this chapter, the person in debt proposes a repayment plan to make installments to lenders over a 3-5 year period
•Chapter 13 offer more advantages over liquidation in chapter 7 and also more preferred than chapter 7.
•Chapter 13 offers individuals the opportunity to save their homes from foreclosure
When is bankruptcy the best option?
In general, bankruptcy should be a last resort. If there is no other way to overcome debt, then bankruptcy becomes a better option.
•Chapter 13 bankruptcy is typically an option for people who have steady income but have fallen behind on their bills.
Companies usually file under chapter 11 because they can still run their business and control the bankruptcy process
Businesses that have filed chapter11 bankruptcy
Blockbuster filed for bankruptcy on September,23 2010
Filed for bankruptcy in June 2011
In 2009 General Motors filed for bankruptcy
What is bankruptcy?
•Bankruptcy is a legal proceeding involving a person or business that is unable to repay their
•The process begins with a petition filed by the person in debt, or the lenders.
•All of the assets of the person in debt are evaluated and measured. They are then used to pay towards the debt.
Filed for bankruptcy in April 22, 2010
This is the chapter where the assets are liquidated, then applied to the total debts of the bankrupt party.
Note: Bankruptcy will stay on your credit for ten years
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