There are two broad forms of bankruptcy, regardless of definition – liquidation and reorganization. The disposal is expected in the United States, under Chapter 7 of the Bankruptcy Code, while the reorganization included in chapters11, 24:13
CHAPTER 7
Chapter 7 bankruptcy is a chapter of the Bankruptcy Act, which requires the sale of assets not exempt by the debtor for the distribution of proceeds to creditors (liquidation). Usually, the trustee collects the debtor’s assets, which are in bankruptcy, under the supervision of the courts and “converts” to make money for distribution to creditors. This is subject to the debtor’s rights to certain goods that are exempt (eg, clothing, personal). Moreover, destruction of property division is governed by the rights of secured creditors. As expected, the majority of Chapter 7 bankruptcy cases, “no assets” cases, because the debtor has no assets, literally, that can be eliminated.
Individual or company filing for Chapter 7 bankruptcy, you need to start submitting a petition to the bankruptcy court serving the area or region where the business is registered or operated with its main advantages.
Petition phase can be described as a phase of the declaration. The debtor must also provide additional documents to the court, in addition to their petition. This may include, among others;
§ schedule of assets and liabilities
§ Hours of current income and expenditure
§ Hours of implementation contracts and unexpired leases
§ Statement of monthly net income and an estimated growth of revenue and administration costs.
In essence, the additional documents to capture all of your assets, debts and financial affairs. On average, this process can take up to six months and may become a debtor in terms of storage and administrative costs. Unfortunately, you can not Chapter 7 bankruptcy, if you have a bankruptcy discharge in the last six to eight years and also, if the current financial affairs May authorize Chapter 13 bankruptcy. Priority debts such as tax support, student loans, bonds and all debts, which have been confirmed can not be discharged under Chapter 7 bankruptcy.
CHAPTER 11
Knowing the different types of failure is very important, especially if you’re in business. Remember that companies sometimes hit a bad time, so be prepared for any eventuality. If you are an entrepreneur, you need to know about Chapter 11 bankruptcy is also known as Re-organization. Given the type of bankruptcy involves partnerships and companies is necessary, you should know about this type of failure.
According to Chapter 11, companies are able to offer a payment plan with their creditors. payment plan must include the time needed to restore business and even their financial obligations. Although there are certain provisions under Chapter 11 bankruptcy, which is similar to Chapter 13 bankruptcy, the two are very different in the sense that a Chapter 13 bankruptcy are the individuals most affected. The fees for partnerships and companies are also different from that burden on those who decline.
What are the fees paid under Chapter 11
Mandatory registration fee of $ 1,000 and another $ 39 various administrative fees applied pursuant to Chapter 11 bankruptcy. If you have questions in common, it is stored only one application fee. Because these rates are binding, the inability of the debtor to pay taxes cause rejection of the petition. Once the case is ongoing, activity or the applicant may be required to pay a court administrator of each quarter. The amount of fees varies depending on the amount involved. In most cases, the fee ranges from $ 250 to $ 10,000.
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