In the United States bankruptcy is governed by Title 11 of the United States Code, otherwise known as the Bankruptcy Code. This section of U.S. Law sets the guidelines, rules, regulations and qualifications for filing a bankruptcy case.
The Bankruptcy Code is separated into 10 parts, covering each aspect of a bankruptcy case and everything involved. They are:
- Part I–Commencement Of Case; Proceedings Relating To Petition And Order For Relief
- Part II–Officers And Administration; Notices; Meetings; Examinations; Elections; Attorneys And Accountants
- Part III–Claims And Distribution To Creditors And Equity Interest Holders; Plans
- Part IV–The Debtor: Duties And Benefits
- Part V–Courts And Clerks
- Part VI–Collection And Liquidation Of The Estate
- Part VII–Adversary Proceedings
- Part VIII–Appeals To District Court Or Bankruptcy Appellate Panel
- Part IX–General Provisions
- Part X–United States Trustees
Many people are also aware of what are considered different Chapters of bankruptcy. These are Chapters of Title 11 in the the United States Code that lay out the specific details for each type of bankruptcy. The most common bankruptcy chapters are:
- Chapter 7: Liquidation
- Liquidation under a Chapter 7 filing is the most common form of bankruptcy. Liquidation involves the appointment of a trustee who collects the non-exempt property of the debtor, sells it and distributes the proceeds to the creditors. Because each state allows for debtors to keep essential property, most Chapter 7 cases are “no asset” cases, meaning the debtor keeps all his or her property.
- Chapter 13: Reorganization
- Bankruptcy under Chapter 13 is more complex reorganization and involves allowing the debtor to keep some or all of his or her property and to use future earnings to pay off creditors. Consumers usually file chapter 7 or chapter 13.
Other types of bankruptcy include Chapter 9: Reorganization for Municipalities, Chapter 11 : Reorganization (usually only for businesses), Chapter 12: Reorganization for Family Farmers/Fisherman, Chapter 15: Cross-Border Insolvency (added by the 2005 bankruptcy reform act) deals with foreign companies having U.S. debts.
Bankruptcy Law is dense and complex. If you are considering bankruptcy, you should speak with an experienced bankruptcy attorney.
For more Bankruptcy Information and related Bankruptcy Law visit the following pages:
- New Bankruptcy Law: Bankruptcy Abuse Prevention and Consumer Protection Act of 2005