Chicago bankruptcy attorney

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Insolvency is a legal status of a person or organization that cannot refund the debts it owes to creditors. In most authorities, bankruptcy is imposed by a court order, regularly initiated by the debtor.

Insolvency is not the legal status that is only that organization or an insolvent person may have, and the term bankruptcy is therefore not a synonym for insolvency. In some nations, including the United Kingdom, bankruptcy is restricted to individuals, and other types of insolvency proceedings (for example management and liquidation) are applied to companies. To formal insolvency proceedings, bankruptcy is applied more generally in America.

The Congress has enacted statutes regulating bankruptcy, chiefly in the form located.

State law therefore plays a significant role in many bankruptcy cases, and it is often not possible to generalise bankruptcy law.

Typically, a debtor declares bankruptcy to obtain relief from debt, and this is achieved through a discharge of the debt or through a restructuring of the debt. Usually, when a debtor files a voluntary petition, his or her bankruptcy case commences.

Chapters

You will find six types of bankruptcy under the Bankruptcy Code, located at Title 11 of the United States Code:

Chapter 7: basic liquidation for individuals and businesses; also referred to as straight bankruptcy; it’s the easiest and quickest form of bankruptcy accessible

Chapter 9: municipal insolvency; a federal mechanism for the resolution of municipal debts

Chapter 11: reorganisation or rehabilitation, used mainly by business debtors, but occasionally by individuals with large debts and assets; known as corporate bankruptcy, it’s a type of corporate financial reorganisation which typically permits companies to continue to work while debt repayment plans are followed by them

Chapter 12: rehabilitation for family farmers and fishermen;

Chapter 15: other international cases and ancillary; supplies a mechanism for dealing with bankruptcy debtors and helps foreign debtors.

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