Short overall picture of the bankruptcy
The bankruptcy is simply defined like incapacity legally allowed to pay a creditor. If a creditor can feel that its customer cannot carry out his payments, it can ask that the customer classify for the bankruptcy in order to gather as much the money which they are due like possible.
Primary laws of the bankruptcy
1. To wipe to clean slate of a debtor, relieving him/it of almost all the debts
2. To refund creditors as much as the debtor can allow itself
Advantages of the bankruptcy
Moreover, to classify for the bankruptcy makes it possible those in the debt to divide their “not-free” capital among creditors, in order to solve their debts completely. On this, the debtors are basically free from all other financial liabilities even if their debts were not entirely paid with far. During the process of classification, the debtor is protected by a “stay,” which neutralizes creditors to continue other actions.
Administrators of bankruptcy
The duty of an administrator manages fields of bankruptcy. To make thus, they must prepare all the writings for the debtor to declare the bankruptcy officially, like reviewing the documents in order to check the fraud. An administrator is also responsible to sell the capital not-free and of advising debtors.
Legal considerations
In article I, section 8 of the constitution of the United States, the congress is governed to apply a uniform law concerning the bankruptcy in all the nation. To state that plays of law that a role criticizes in the majority of bankruptcy locks up, thus it is illogical to make generalizations about the questions and of the policies of bankruptcy.
Chapters of bankruptcy
There is a total of six types of bankruptcy classified under the code of bankruptcy. Chapter 7 of title 11 of the code of the United States describes a type of “liquidation-model” of bankruptcy; Chapter 9 discusses the municipal bankruptcy; Chapter 11 described the type of “rehab” employed for the majority by debtors of businesses with substantial debts; Chapter 12 speaks about a case about plan/rehab of payment for farmers and fishermen; The chapter 13 fact the same ones as the preceding case, however it is designed for individuals with a constant flow of the income; and the chapter 15 draft “frontier” cases. Chapters 7 and 13 are among the most common types of personal bankruptcy.
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