What are the differences among the types of bankruptcy? What is your opinion about the 2005 changes which made it more difficult to use Chapter 7? Is it a far balance for both creditors and debtors? Please explain your view. (300+ words)
There are three chapters commonly used under which to file bankruptcy: Ch 7, 11 and 13.
Chapter 7: full liquidation of either a business entity or an individual in which assets are sold, debts are repaid and any remaining debts are cancelled. There are limited exceptions for debts that cannot be cancelled in bankruptcy including student loan, child support, payroll tax liabilities, and a few others.
Chapter 11: a business entity reorganization in which the court and the major creditors restructure a company in an attempt to assist a company to become a viable entity ...
The solution presents a paragragh for each of Chapter 7, 11 and 13 with explanation and examples.