Small Business

Corporate or Personal Bankruptcy is an inability of an individual or corporate entity to pay creditors or debt obligations. When this occurs, the corporation or person can declare bankruptcy which is handled by federal law. When this happens, a person or corporation’s assets are given to a trustee and used to pay off as much of the owed debt as possible. In the U.S. there are six types of bankruptcy under the Bankruptcy Code.
Chapter 7: Basic liquidation for individuals and businesses.
Chapter 9: Municipal bankruptcy.
Chapter 11: Rehabilitation or reorganization used primarily by business debtors, but sometimes individuals with substantial debts and assets.
Chapter 12: Rehabilitation for family farmers and fishermen.
Chapter 13: Rehabilitation with a payment plan for individuals with a regular source of income.
Chapter 15: Ancillary and other international cases.