The current bankruptcy law, passed in 1978, also known as the Bankruptcy Code. The order was amended in 2005, but in 2005 amendments is a proposal for cases or before the effective date of the amendment, "October 17, 2005 . The Code is supplemented by federal rules of bankruptcy procedure and local rules governing the procedures used in bankruptcy courts.
The code is in Title 11 U.S. Code. It consistsnine chapters: 1, 3, 5, 7, 9, 11, 12, 13 and 15 Chapters 1, 3-5 to be universally valid. Chapter 7, 9, 11, 12, 13 and 15 deal with each specific type of bankruptcy proceedings. The Code applies to the financial difficulties of individuals or legal persons as a debtor. "
Debtors file bankruptcy for various reasons, including divorce, loss of jobs and health problems. After the various conditions of residence of the debtor, at the request of a break from a collection entitled Business. Submitting a bankruptcy, the debtor may obtain discharge of personal liability for many debts, and may be able to organize others.
There are two basic types of bankruptcy: liquidation and reorganization. Company from the liquidation under Chapter 7, the debtor's non-exempt assets are sold for the benefit of creditors. In exchange for the release of these goods, the debtor obtained a discharge in general, the personal liability for the advance –> Bankruptcy debts and assets acquired after the date of filing can enjoy.
Chapter 11, 12 and 13 different types of restructuring plans and payments. In its bankruptcy reorganization, the debtor's assets are sold. Individual debtors often file Chapter 13 cases to save their homes. Reorganization bankruptcies allow the debtor the opportunity to restructure the debt and pay, in whole or in part funded through a plan of their income. Schedulebe confirmed by the court are not borne by the creditors.
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