The applicant for Chapter 7 bankruptcy may be an individual or a corporation. This form of bankruptcy may be filed by corporations, partnerships, and sole proprietorships. Each of these entities must have received an approved credit counseling program within the preceding 180 days.
Another filing code, intended for minor filings and excluding corporations, is available. Chapter 13 is comparable to Chapter 7, but only applies to individuals and individuals operating unincorporated businesses whose unsecured and secured debts meet certain criteria. To qualify for Chapter 13 bankruptcy, secured and unsecured debt must be below a certain threshold. This quantity is periodically adjusted in accordance with the consumer price index.
In addition to individuals and standard business categories, bankruptcy filing codes can also apply to public entities. Municipalities, municipal utilities, and school districts are eligible to file under Chapter 9. This may include cities, communities, villages, and other structures. Chapter 9 bankruptcy was established in response to the Great Depression and is significantly less prevalent in modern practice.
Chapter 12 filings are specific to certain enterprises, just as Chapter 9 filings were specific to municipal entities. Chapter 12 bankruptcy provides protection for family farmers and fisheries with a steady income. This code was designed for these families' simplicity and usability. It achieves this by imposing strict time constraints on how the debt is to be repaid. The restructured debt must be repaid within three to five years, depending on the insolvent party's income.
When filing for bankruptcy, not all businesses intend to shut down their operations. Chapter 11 filings permit businesses to restructure their creditor payments in order to continue operations. This form of filing has varying implications depending on the business structure. If a corporation declares bankruptcy under Chapter 11, the shareholder's personal assets will not be affected. In the case of a sole proprietorship, however, the owner's personal assets may be applied to the business's debt.
The most recent addition is a Chapter 15 filing based on the Model Law created by the United Nations Commission on International Trade Law. This UN-derived code governs international insolvency affecting United States assets.
Please consult the website of Des Moines business litigation attorneys LaMarca & Landry, P.C. for more information on how to handle bankruptcy filings.""
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