BL Unit IV Assessment: Elements of Bankruptcy

Elements of Bankruptcy
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ELEMENTS OF BANKRUPTCY
Bankruptcy is referred to as a legal procedure that enables consumers in eliminating their debts through the protection offered by court. The main types of bankruptcy that are popular are chapter thirteen and seven, where chapter seven is largely used by the individuals (Cheeseman, 2013). Moreover, another type called chapter eleven is applicable. Bankruptcy offers an opportunity to individuals for starting a fresh with their money even though the bankruptcy elements are complex. There important elements of chapter seven, eleven and thirteen, as well as the key difference in all.
The chapter seven-bankruptcy deals with elimination and liquidation of the remaining debt. Individuals file this kind often, although businesses may opt to file for it too, whose timeline is a period of three to six months. However, the bankruptcy in chapter eleven is usually sought after by corporations that are publicly traded as well as large companies. In addition, chapter thirteen bankruptcy helps in reorganization of the debt as well as offering a repayment opportunity. The individuals who have the confidence about paying their debt may opt for this kind of bankruptcy. The businesses file for this kind so that they may progress with the running of their business via bankruptcy process.
In bankruptcy chapter seven, the debtor bears the advantage of not having future obligations of the debts that have been discharged (Cheeseman, 2013). In chapter thirteen bankruptcy, it is the debtor’s mandate to pay part or all debts from the prospect income in a period ranging three to five years via chapter thirteen plan. The chapter eleven bankruptcy is the type usable by large businesses in reorganization of their debts and progresses with operation.
Conclusively, every chapter of bankruptcy is very crucial in respective aspects. Chapter seven is filed mainly by individuals although businesses may opt to file for it too; whose timeline is a period of three to six months. Alternatively, the chapter eleven bankruptcy is usually sought afte...