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Bankruptcy

Bankruptcy is a legal proceeding that involves consumers or businesses unable to pay off their outstanding debts. There are several types of bankruptcies, and these are Chapter 7 bankruptcy, Chapter 13 bankruptcy and Chapter 11 bankruptcy. Chapter 7 bankruptcy is for individuals, under this chapter debts are discharged. Chapter 13 bankruptcy is also for individuals, debts are reorganized, restructured and repaid over a period of time (three to five years) set down by the judge.  Chapter 11 bankruptcy is for businesses, and it permits businesses to reorganize and restructure their debt. It is up to bankruptcy court to decide on which type of bankruptcy to apply.  The bankruptcy court will supervise the entire process.

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