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Bankruptcy Law Description: Bankruptcy is a federal law that allows individuals, married couples, and businesses to eliminate or restructure their debts when they have financial difficulties. Because it is a federal law, it applies throughout the United States. Bankruptcy law is federal statutory law contained in Title 11 of the United States Code.
Bankruptcy law provides for several different types of bankruptcy, called chapters, because the various provisions that govern them are contained in different chapters of the Bankruptcy Code.
A bankruptcy settlement will generally show up on your credit report for a period of 10 years. You can file for bankruptcy without a lawyer, but because of the complications involved in the Bankruptcy code, it is not generally advised. Because of the seriousness of bankruptcy, mistakes can be very costly.
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy: Chapter 7 is the most common form of bankruptcy. It is a liquidation proceeding in which the debtor's non-exempt assets are sold by a trustee and the proceeds are distributed creditors according to the priorities established in the Code. Wages the debtor earns after the case is begun are the debtor's, beyond the reach of creditors who had claims on the date of filing.
Chapter 11 Bankruptcy Law
Chapter 11 Bankruptcy: Chapter 11 reorganization proceeding are typically for corporations or partnerships. In Chapter 11, the debtor usually remains in possession of his assets and continues to operate any business, subject to the oversight of the court and the creditors committee.
Chapter 13 Bankruptcy Law
Chapter 13 Bankruptcy description: Chapter 13 is a repayment plan for individuals with regular income and unsecured debt less than $290,525 and secured debt less than $871,550. The debtor keeps his property and makes regular payments to a trustee out of future income over about a 3 to 5 year period. Repayment in Chapter 13 generally ranges from 10 percent to 100 percent, depending on the debtor's income and the type of debt.
For more information click here: www.law.cornell.edu/topics/bankruptcy.html