Bankruptcy Code

Introduction

The Bankruptcy Code, codified at Title 11 of the United States Code, governs bankruptcy proceedings in federal courts. The Code provides for the reorganization or liquidation of debtors’ assets to satisfy creditor claims while giving debtors a fresh start.

Chapters of Bankruptcy

Chapter 7 provides liquidation for individuals and businesses. Chapter 11 permits business reorganization. Chapter 13 provides debt adjustment for individuals with regular income. Chapter 9 addresses municipal bankruptcy. Chapter 12 addresses family farmer and fisherman bankruptcy.

Automatic Stay

The filing of a bankruptcy petition triggers an automatic stay that stops creditor collection actions, lawsuits, foreclosures, and repossessions. The stay provides breathing room for debtors and ensures orderly administration.

Discharge

Individual debtors may receive a discharge of most unsecured debts, providing a fresh start. Certain debts (student loans, taxes, child support, fraud-based debts) may not be dischargeable.