Bankruptcy 1 of 3 (47)

Question 1

Chapter 7 Bankruptcy

Answer 1

A form of bankruptcy applicable to businesses and individuals under which the debtor’s assets are liquidated and the creditors are paid according to the priority of their claims. This may be entered into either voluntarily by the debtor or involuntarily by the creditors.

Question 2

Chapter 11 Bankruptcy

Answer 2

A form of bankruptcy, also referred to as a reorganization, applicable to businesses under which the debtor continues to operate the business and establishes a plan, agreed upon by creditors, as to how obligations will be satisfied.

Question 4

Chapter 13 Bankruptcy

Answer 4

A form of bankruptcy, also referred to as a debt adjustment plan, applicable to individuals and small businesses under which a debtor earning sufficient income proposes a detailed plan for the repayment of debt, generally over 3 to 5 years, subject to the approval of the courts.