Bankruptcy 7-11-13

Bankruptcy and Insolvency

Bankruptcy - Chapter 7 -11- 13

BANKRUPTCY - The state or condition of a bankrupt.

BANKRUPT - A person who has done, or suffered some act to be done, which is by law declared an act of bankruptcy; in such case he may be declared a bankrupt.

There is much difference between a bankrupt and an insolvent. A person may be a bankrupt, and yet be perfectly solvent; that is, eventually able to pay all his debts or, he may be insolvent, and, in consequence of not having done, or suffered, an act of bankruptcy. That person may not be a bankrupt. Again, the bankrupt laws are intended mainly to secure creditors from waste, extravagance, and mismanagement, by seizing the property out of the hands of the debtors, and placing it in the custody of the law; whereas the insolvent laws only relieve a person from imprisonment for debt after he has assigned his property for the benefit of his creditors. Both under bankrupt and insolvent laws the debtor is required to surrender his property, for the benefit of his creditors. Bankrupt laws discharge the person from imprisonment, and his property, acquired after his discharge, from all liabilities for his debts insolvent laws simply discharge the debtor from imprisonment, or liability to be imprisoned, but his after-acquired property may be taken in satisfaction of his former debts.

BANKRUPTCY, CHAPTER 7 - A type of bankruptcy in which a person's assets are liquidated (collected and sold) and the proceeds are distributed to the creditors.

BANKRUPTCY, CHAPTER 11 - The part of the U.S. Bankruptcy Code that contains the provisions for Court-supervised reorganization of debtor companies. The debtor maintains control of the business in a Chapter 11 proceeding.

BANKRUPTCY, CHAPTER 13 - A type of bankruptcy in which a person keeps his assets and pays creditors according to an approved plan.

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