US-Bankruptcy-Code-Is-Very-Specific-Regarding-How-1 by Ithed1962588


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									US bankruptcy code is very specific
 regarding how to file bankruptcy.
Bankruptcy code is very confusing and deals with all of the many different
types of bankruptcy that a business or person can file It's important to note
that even though people can file different bankruptcy forms, there is still only
one main bankruptcy code which deals with all of the different types of
bankruptcy in the United States By "filing chapter 11", or "filing chapter 7", the
company is just filing under which chapter of the code best fits its situation
 There are several major differences between the chapters that are in
bankruptcy code For instance, there is a difference between the two most
common chapters for bankruptcy filings
 Chapter 7 is also called "liquidation" and what happens in this chapter is that
all of the extra assets of that company or person are sold off in order to pay
most of the outstanding debts Everything that can be sold for this purpose will
be sold, and the debtor will only be left with the few items that can be held
back due to exemptions
 Something important to consider about chapter 7 bankruptcy is that the
person will still have enough exempted items to hopefully put his or her life
back together This type of bankruptcy is most common when the person in
question does not have the resources necessary to pay off his or her debts
 Bankruptcy code both explains exactly how to legally go about putting this
type of bankruptcy into effect as well as mentioning any special tax provisions
that might apply in this case The other chapters that are commonly filed under
in US bankruptcy code include chapter 11, which is reorganization - basically
reorganizing the business or financial situation so that it is possible to pay off
all debts in the future
 The other two types of bankruptcy are not filed by businesses - chapter 12 is
specific to farmers who have personal debts, and chapter 13 is specific to
other people with personal debts In order to file under any of these three
chapters, you or your company must have a steady income, and be able to
prove this
 Once it is proven, your finances will be reorganized so that you can pay off
your debts and eventually improve your credit rating

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