qacrawler
07-07-2006, 04:25 AM
Chapter 7 is the liquidation chapter of the Bankruptcy Code. Chapter 7 cases are commonly referred to as “straight bankruptcy” or “liquidation” cases and may be filed by an individual, corporation or partnership. A trustee is appointed to collect and convert to cash all property of the debtor to pay creditors. In an individual case the debtor is allowed to claim certain property as exempt and the debtor receives a discharge. Corporations and partnerships do not receive discharges.
Chapter 9 is only for municipalities and governmental units such as schools, water districts and power companies.
Chapter 12 is only for those who qualify as family farmers. Only a family farmer with a regular annual income may be a debtor under Chapter 12.
Chapter 13 is the debt repayment chapter for individuals with a regular income and whose unsecured debts are less than $290,526 and secured debts of less than $871,550. This includes individuals who operate businesses as sole proprietorships. Chapter 13 is not available to corporations or partnerships. A chapter 13 debtor will propose a plan of repayment which must be approved by the court. The amounts set forth in the plan must be paid to the chapter 13 trustee who will distribute the funds. Many debts that cannot be discharged can be paid over a period of time in a chapter 13 case. After the completion of payments under the plan, debtors receive a discharge of those debts that are dischargeable.
Chapter 11 is the reorganization chapter available to businesses and individuals who have substantial assets or income that may be used to restructure and repay their debts. Creditors vote on whether or not to accept the debtor’s plan of reorganization which must be approved by the court. Generally the debtor remains in control of the assets; however, the court may order the appointment of a trustee for cause including the failure to file a plan within a reasonable amount of time.
Chapter 9 is only for municipalities and governmental units such as schools, water districts and power companies.
Chapter 12 is only for those who qualify as family farmers. Only a family farmer with a regular annual income may be a debtor under Chapter 12.
Chapter 13 is the debt repayment chapter for individuals with a regular income and whose unsecured debts are less than $290,526 and secured debts of less than $871,550. This includes individuals who operate businesses as sole proprietorships. Chapter 13 is not available to corporations or partnerships. A chapter 13 debtor will propose a plan of repayment which must be approved by the court. The amounts set forth in the plan must be paid to the chapter 13 trustee who will distribute the funds. Many debts that cannot be discharged can be paid over a period of time in a chapter 13 case. After the completion of payments under the plan, debtors receive a discharge of those debts that are dischargeable.
Chapter 11 is the reorganization chapter available to businesses and individuals who have substantial assets or income that may be used to restructure and repay their debts. Creditors vote on whether or not to accept the debtor’s plan of reorganization which must be approved by the court. Generally the debtor remains in control of the assets; however, the court may order the appointment of a trustee for cause including the failure to file a plan within a reasonable amount of time.
