THE BANKRUPTCY SYSTEM TODAY
The following is an adaptation of the transcript of the Video:
The United States now has a sophisticated bankruptcy system.
The Bankruptcy Laws are a part of the Federal Legal System. It has Chapters just like most non-fiction books. Chapter 1, 2, 3.etc.
Each type of bankruptcy has its own Chapter:
Chapter 7 is a liquidation- for companies or individuals;
Chapter 9 is for cites- Like Detroit Michigan that recently filed.
Chapter 11 is usually for large business that are trying to reorganize and stay in business.
Chapter 12 is for family farmers that are trying to reorganize and stay in business.
Chapter 13 is used by individuals or couples to reorganize their finances.
By far, the most frequently filed types of bankruptcy cases in the country are Chapter 7 and Chapter 13.
According to the United States Court System, in 2013, over 728,000 Chapter 7 cases and over 333,000 Chapter 13 cases were filed in the United States. In 2013 in Georgia over 28,000 Chapter 7 cases and almost 30,000 Chapter 13 cases were filed.
In a Chapter 7, a person is allowed to keep a certain amount of property, which is set by law, and wipe out most if not all of his or hers debts. There are some debts that cannot be wiped out like child support, most taxes and most student loans. When a Chapter 7 is over you would not owe any dischargeable debts unless you want to keep some of your debts like for your car or your home.
Chapter 13 has a different set of rules. It is a pay back plan. People file Chapter 13 for various reasons such as they are behind on their house and do not want to lose it to foreclosure, or their car is about to be repossessed and they want to keep it. Sometimes they make too much money to be allowed to do a Chapter 7 liquidation.
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