Bankruptcy Laws – Have a Clear Image on the Subject
Bankruptcy laws, as any other laws, as a matter of fact, may sometimes be difficult to
understand. Study them carefully and perhaps ask for help if things are not clear, and you
will certainly find the best solution for your financial situation.
The various solutions you have when you are unable to pay your debts are to be found in
some specific chapters referring to bankruptcy. Let’s see what these solutions are.
a) Liquidation
This issue is presented in Chapter 7 – “Straight bankruptcy”. The debtor’s non-exempt
property is taken over by the bankruptcy trustee. He will sell the property in order to pay
the creditors. The debtor will be informed about the results of the proceeding through a
discharge note.
b) Debt rehabilitation
The proceeding is largely described in Chapter 9 and also in Chapters 11 to 13 as follows:
• Chapter 9 refers to municipal debts;
• Chapter 11 presents the conditions in which a business can rehabilitate its financial
status through a reorganization plan.
• Chapter 12 applies to family farmers, which can obtain a longer repayment period
for their debts.
•
Chapter 13 – it is similar to Chapter 12, but it refers to individuals.
Bankruptcy laws are quite clear if you read them carefully, but, if you are not sure you
fully understand them, you should ask a professional for help.
