Bankruptcy allows those in debt, either an individual or a business, to have most of the debts discharged and allow the rights of the creditors to be protected as well. This essay will discuss the following bankruptcy situations:
Case # 1: A woman is the sole proprietor of a small business that is about to fail…
Each case can file any of these types of bankruptcy, however, a specific chapter may be better suited for each individual case.
Chapter 11 is mainly bankruptcy for business and its purpose is to reorganize the debt of the business. Reorganization divides the credit accounts into different classes and assets are then liquefied and distributed. The debtor can devise a plan of reorganization for the approval of the court within a 120-day deadline or the debtor can request a court appointed trustee to plan the reorganization. This chapter of bankruptcy allows the business to continue to operate during the bankruptcy under the supervision of Bankruptcy Court. Chapter 11 allows for liquidation of the business assets that are not immediately needed for the operation of the business and a plan for payment of the assets needed for the operation of the business. This will allow the sole proprietor in this case to stay in business and she can change her business to a more suitable and profitable business under the supervision of the court while at the same time eliminating the majority of her debt.
In this case, the debtor should file chapter 7 bankruptcy. The debtor is assigned a trustee who liquidates assets and then divides the proceeds fairly among the creditors. ...
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(“Bankruptcy Law Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
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(Bankruptcy Law Essay Example | Topics and Well Written Essays - 500 Words)
“Bankruptcy Law Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.net/law/290728-bankruptcy-law.
The research centers on the responsibility of the debtors in a Chapter 11 bankruptcy and reorgnisation process. The research deals with the required acts of the creditors in a Chapter 11 Bankruptcy and reorgnisation proceeding. The main purpose of the essay is to show convincing evidence that the Chapter 11 Bankruptcy and reorgnisation law can successfully breath new revenue-enhancing life to once unprofitable companies.
First is the debtor. The debtor is a person or entity owing the money. It is the party that files for a bankruptcy relief. The other one is the creditor. It is a party or a company owed by the debtor and is claiming that the debts are due to them by the debtor.
The people whose debts come mainly from business are eligible for Chapter 7.
If a person's income is less than or equal to the median income of his state then he is eligible for Chapter 7. If it is above then he has to pass the means test. Calculate the current monthly income and see if the total monthly disposable income is less than the $100 then the person passes the means test and he is eligible for Chapter 7.
This case is hardly astounding given the opaque concern of wellbeing of debtors in the UK.
In the United States, on the contrary, the right of a debtor to restore itself has for eras been seen as greater to the right of a creditor to look for and obtain refund in full of what it is payable.
Recently the United States has experienced the largest bankruptcy case of the Lehman brothers' holdings which has over 636 billion dollars in assets, this is the largest case in US history and it was voluntary bankruptcy where the company seeks to be protected by chapter eleven.
From an individual's point of view, if he or she declares bankruptcy the court of law discharges the debt or repays the debt after selling the property or makes an appropriate plan to repay the debt. From the company's perspective, if the company files bankruptcy protection in the court of law then the court assign an agent to the company, who arranges payments to repay the debt through different modes or ceases the business operations and auctions off their asstes and property.
Thus, in general, this type of bankruptcy is available to both individuals and to businesses. In the past, it was relatively easy for individuals and these types of business entities to qualify for the liquidation process. This, however, has changed as a result of intensive lobbying by creditor associations a growing sense that the Chapter 7 process was being abused.
& Bakewell, K., 2002).
A debtor may be qualified to apply for Chap. 11 bankruptcy after he received credit counseling from an authorized agency. A debtor is required within 20 days after filing to submit to the court a list of secured and unsecured debts, statement