If you are having financial difficulties and may be forced to file for insolvency, it is important to understand the particular bankruptcy code that provides the proper procedures unique to your process. Typically, there are 6 codes which are enshrined within several chapters of Title 11 of the United States codes. How you choose the chapter to file for bankruptcy often depends on the situation you are in.
You can petition because you have too many debts that cannot be paid due to financial constraints. These chapters provide for the proper information that you may need. The same applies to corporations, small businesses, partnership and big companies. Here are the 6 codes:
1. Under Chapter 7 an individual or a business, partnership, sole proprietorship or even a corporation can apply for a declaration of bankruptcy. The requirement here however, is that the applicant must have received approved credit counseling not less than 6 months, before the filing for insolvency.
2. Chapter 13 provides for smaller unincorporated businesses and individuals. However, the individual or business must have secured or unsecured debt that is below a specific amount required. This amount changes quite often to ensure that it is in line with consumer price index.
3. These codes that are available also apply to particular establishments and public institutions. This is provided under Chapter 9. This chapter was created to respond to the great depression and it is rarely utilized in modern set up. This is because it is highly unlikely to find a municipal entity falling into deep debt and being forced to be declared bankrupt.
4. Another important code is found in Chapter 12. Here, this code was established particularly to make things simple for certain types of families. This is done by providing a clear guideline on how the debts owed by such families, should be paid putting into consideration the specific income of the families.
5. Chapter 11 ensures that business owners can keep their businesses active. The idea is to find a way to restructure its credit payment so that it does not affect the existence of the business.
6. A more recent code that was included around the year 2005 falls under Chapter 15. Generally, this Chapter was introduced to ensure compliance with the principles highlighted under the United Nations Commission on International Trade Law. This chapter covers procedures for companies that conduct their business in multiple countries.
0 comments:
Post a Comment