Bankruptcy & Credit Management

Legally, bankruptcy is defined as a system of procedures by which an insolvent debtor may be released from, or modify debt obligations. It is a matter of federal law under the Constitution. Associations, corporations, and individuals whose assets are less than their liabilities can file. Three major types of bankruptcy proceedings are provided for by the Bankruptcy Code. Chapter 7, or liquidation, cases involve the selling of the debtor's property by a trustee. Chapter 13, also known as adjustment proceedings entail a court and creditor approved payment plan being enacted by the debtor. In Chapter 11, or business reorganizations, a modification plan is developed by a debtor business. This plan may dispose of assets, forgive debts, provide for mergers, or recapitalize a corporation. The links herein relate specifically to bankruptcy and credit management.