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Rhythm and Hues (Chapter 11 Bankruptcy)


Rodney

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It's no big deal. It's not Chapter 7

 

Chapter 7 Business and Corporation Bankruptcy

 

 

 

Chapter 7 business and corporation bankruptcy typically causes a business to cease all operations, depending on the amount of and type of debt and the advisement of the bankruptcy trustee. For example, a company could be closed or it could be sold to another investor if approved by the bankruptcy trustee. Furthermore, in a Chapter 7 filing, corporations and partnerships do not receive a discharge; instead, the corporation or partnership is dissolved. As in the case of an individual filing Chapter 7, however, most debts, depending on their nature, are discharged.

 

 

Chapter 11 Personal Bankruptcy & Business and Corporation Bankruptcy

 

 

 

Chapter 11 bankruptcy is available to both individuals and all types of corporations, businesses and partnerships. Instead of discharged debt like the Chapter 7 bankruptcy plan, Chapter 11 is a restructuring of existing debts. Moreover, a corporation, business or partnership remains in complete control of its assets, whereas in Chapter 7 business divisions are either closed or sold.

 

 

Chapter 13

 

 

 

Unlike Chapter 7 and 11, Chapter 13 bankruptcy exists mainly for individuals and is the rarest form of bankruptcy filed. In fact, it is nearly the opposite of chapter 7 bankruptcy. For example, in a Chapter 13, instead of an individual's non-secured debts being discharged, the individual presents a plan to repay the debt within a period of three to five years.

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