What is Bankruptcy? Bankruptcy is a federal court process that helps individuals and businesses repay their debts under the protection of the bankruptcy court (Chapter 13 Bankruptcy) or wipe their debts out altogether (Chapter 7 Bankruptcy). When you file for bankruptcy, an automatic stay goes into effect which prohibits your creditors from taking action to collect the debt without the approval of the court. There are two basic types of bankruptcies: liquidation or reorganization. In the US, liquidation is known as Chapter 7 Bankruptcy, which refers to the chapter of the bankruptcy law that allows your assets to be sold off (liquidated) to pay creditors. Reorganization is most commonly known as Chapter 13 Bankruptcy.
Posted on: Mon, 09 Jun 2014 14:00:29 +0000
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