| |
Bankruptcy
An individual who is unable to meet their obligations to their creditors (those entities to which the individual owes money) can initiate a legal declaration of said inability by asking for a court approved declaration of bankruptcy.
In the United States bankruptcy falls under federal jurisdiction but is implemented by statute law, specifically the Bankruptcy Code also known as Title 11. Cases are filed in an adjunct court of the U.S. District Courts known as the United States Bankruptcy Court. State law comes into play as well.
In general there are six types of bankruptcy: Chapter 7 involving liquidation, Chapter 9 covering municipal bankruptcy, Chapter 11 for financial rehabilitation of businesses, Chapter 12 instigating a payment plan for family farmers and fishermen, Chapter 13 establishing repayment plans for those with a regular income, and Chapter 15 for ancillary and cross-border cases.
Of these types, the most common to be implemented are Chapter 7 and Chapter 13.
More terms explained
|
|
|
