What is Bankruptcy? A consumer protection law. It is a Federal process, which allows consumers to have debts forgiven or discharged. Prevents creditors from collecting dept outside of the bankruptcy filing.
What is Bankruptcy? The process involves complex areas of the law that encompass elements of: Contract law Corporate law Tax law Real estate law
Causes of Bankruptcy Scandals Lawsuits Government Fines Creditor Collections Sudden Loss of Revenue
Bankruptcy TermsDebt Adjustment: Settled repayment arrangements that differ from the original arrangements.Dischargeable Debts: Debts resolved during bankruptcy.Nondischargeabe Debts: Debts unresolved when filing for bankruptcy.
Bankruptcy TermsLien: A charge or impediment upon property for the satisfaction of a debt.Secured Debt: A debt on which a creditor has a lien.Unsecured Debt: A debt that is not tied to any item of property.
Types of Bankruptcy Chapter 7 Best known as Liquidation Bankruptcy For individuals and companies Most common type
Types of Bankruptcy Chapter 7 Process involves selling off non-exempt assets from the debtor to pay off debt Income generated afterwards is not apart of bankruptcy allowing the debtor to keep money
Types of Bankruptcy Chapter 11 Most complex amongst businesses & a few individuals The debtor continues to function and maintain ownership of all assets while working out a plan to pay off creditors
Types of Bankruptcy Chapter 11 The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. A 120-day time span in which the debtor has to come up with a repayment plan If they fail, the creditor will develop a plan themselves
Types of Bankruptcy Chapter 12 For farm owners Allows farmers to keep their assets while forming a payment plan to pay off their creditors
Types of Bankruptcy Chapter 13 Similar to Chapter 11, only it is for individuals They are given a 3 - 5 year repayment plan while keeping their assets
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