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Laws on bankruptcy

HomeBankruptcyLaws on bankruptcy

If a debtor is unable to pay the debts, then he can get his debts discharged in parts or full with the help of the Bankruptcy Law.
The ideology behind laws on bankruptcy is not to punish the debtor for his inefficiency to pay the debts instead, to provide him an opportunity to start his life afresh.

The assets of the debtor can be divided amongst the creditors or he can continue his business and pay them their debts.
Either the debtor or his creditors can initiate the bankruptcy proceedings.

The United States Bankruptcy Courts conduct the proceedings of bankruptcy and are dependent on the bankruptcy rules put forth by the Supreme Court.

Chapter 7 bankruptcy that involves liquidation of assets is the most common.
A court-appointed trustee takes charge of debtor’s assets, sells them and distributes the proceeds amongst his creditors.
Debts like child support, alimony and tax debts are not dischargeable.

In Chapter 11 and Chapter 13, the debtor has a chance to reorganize by providing a repayment plan and making the payments to his creditors over the next few years.

Chapter 11 is for businesses while Chapter 13 is for individuals.

Important: The articles available on are neither legal advice nor a replacement for an attorney. The contents are general information and guidance concerning different legal issues. We make sure that these articles prove helpful to you, but we do not promise or guarantee that they are suitable for your condition. We also do not take responsibility for any loss that might cause to you using these articles. Hence, we strictly suggest you get expert legal advice. Consult or hire an attorney in case of any doubt.

Born in New York City and educated at City Law School. I am majored in Criminal Law and administration. with more than 20 years of experience I dealt with criminal cases randing from parking crimes, domestic crimes to violent crimes, drug crimes to murder cases. My scope of practice includes investigation and interview witness, building a defense strategy, negotiating with prosecution, plea bargains, trials, parole , probation , motions to dismiss or motions to suppress.