Bankruptcy

Bankruptcy is a common tool used by individuals and businesses when they can no longer pay their debts get a fresh start by liquidating assets to pay their debts or by creating a repayment plan. Personal vs Corporate bankruptcy laws are not the same and have different rules and chapters.

Personal Bankruptcy Chapter 7 is for individuals who cannot repay acquired debt. This chapter is meant for people who have low income and the end result is a bankruptcy discharge of qualifying debt. Chapter 13 is for individuals who have a substantial income and can manage to pay their debt once repayment plan is in place tailored to their debt specifics. The purpose to help those individuals who may have an improved financial condition as a result of bankruptcy or are struggling to pay debts but are not completely out of hope.

==Corporate/Business Bankruptcy == Chapter 7 for businesses leads to the dissolution of the entity instead of reorganization. Chapter 11 is for businesses, including corporations and is meant to either reorganize or liquidate their assets in order to repay debt. Most of the time, filing this in this chapter leads to reorganization. Debtors get to propose their own plans at first, but after a certain amount of time has passed, creditors may also propose reorganization plans. The creditors have to vote to approve of whatever plan is selected.

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<p class="MsoNormal" style="margin: 0in 0in 0pt; line-height: normal; -ms-text-autospace:; mso-pagination: none; mso-layout-grid-align: none;"><span style="color: rgb(6, 56, 96); line-height: 115%; font-family: "Cambria","serif"; font-size: 12pt; text-shadow: none; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin; mso-bidi-font-family: Helvetica; mso-fareast-font-family: "Times New Roman"; mso-fareast-theme-font: minor-fareast; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;"><span style="color: rgb(6, 56, 96); line-height: 115%; font-family: "Cambria","serif"; font-size: 12pt; text-shadow: none; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin; mso-bidi-font-family: Helvetica; mso-fareast-font-family: "Times New Roman"; mso-fareast-theme-font: minor-fareast; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;"><span style="color: rgb(29, 29, 29); font-family: "Cambria","serif"; font-size: 12pt; text-shadow: none; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin; mso-bidi-font-family: Helvetica;"><span style="color: rgb(6, 56, 96); font-family: "Cambria","serif"; font-size: 12pt; text-shadow: none; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin; mso-bidi-font-family: Helvetica;">'''<span style="color: rgb(6, 56, 96); font-family: "Cambria","serif"; font-size: 12pt; text-shadow: none; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin; mso-bidi-font-family: Helvetica;">General Differences Between Business and Personal Bankruptcy '''

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