Chapter 7, 11 & 13 Bankruptcy Rules
Title 11 of the United States Code, also known as the Bankruptcy Code, contains all federal bankruptcy rules. The individual states do not have separate legislation for bankruptcy rules, as bankruptcy rules are regulated federally by the Supreme Court. Bankruptcy rules regulate the supervised legal process of bankruptcy that facilitates debt relief for debtors who can no longer pay their debts. Chapter 7 bankruptcy rules describe the process of liquidation of assets, while chapter 11 bankruptcy rules and chapter 13 bankruptcy rules describe the process of reorganization of a debtor’s assets or company and repayment of the remaining debt. Chapter 7 bankruptcy rules, chapter 11 bankruptcy rules and chapter 13 bankruptcy rules describe the priority of the creditor’s interest and attempts to treat them with a certain amount of equality. The decree that creditors must stop all attempts at collecting the debts once bankruptcy has been filed is also stated in the chapter 7 bankruptcy rules, chapter 11 bankruptcy rules and chapter 13 bankruptcy rules.
Chapter 7 Bankruptcy Rules
Chapter 7 bankruptcy rules state that a bankruptcy proceeding can be entered into voluntarily by a debtor or initiated by creditors. The main purpose of chapter 7 bankruptcy rules is to define the supervised liquidation process. Chapter 7 bankruptcy rules describe the types of debt contained by this form of bankruptcy. Chapter 7 bankruptcy rules also define the circumstances necessary for a debtor to be discharged of the rest of his debt if it has not been paid in full after liquidation.
Chapter 11 Bankruptcy Rules
Chapter 11 bankruptcy rules are different from chapter 13 bankruptcy rules in that they do not define a limit to the amount of debt a debtor may have to apply. For this reason, chapter 11 bankruptcy rules are more applicable to large corporations than to individuals. Chapter 11 bankruptcy rules define the circumstances and requirements for a supervised reorganization of a debtor’s assets and business, and a payment plan in favor of his creditors if the debtor is allowed to continue to do business.
Chapter 13 Bankruptcy Rules
The choice for most individuals who do want to retain some of their assets, like their house, is the type of bankruptcy governed by chapter 13 bankruptcy rules. Chapter 13 bankruptcy rules are similar to chapter 11 bankruptcy rules because they too describe the supervised process of reorganization of a debtor’s assets and the forming of a payment plan to pay off the remaining debt from the debtor’s income. Chapter 13 rules differ from chapter 11 rules in the fact that they state a limit to the amount of debt eligible, and allow for protection of a debtor’s IRA.