subject: Living With Bankruptcy [print this page] Living With Bankruptcy Living With Bankruptcy
Living With Bankruptcy
In 1978 there were about fifty thousand personal bankruptcies in our country. In 1988 there were nearly six hundred thousand personal bankruptcies in America, according to an article in the USA Today newspaper. Assuming the trend will continue, we can realistically expect to see one million bankruptcies a year by the year 2000. That statistic spells great difficulty for many smaller merchants and for the credit industry as a whole. But even more important, it reflects a decline in the responsibility index for the average American family, both Christian and non-Christian alike. Bankruptcies aren't limited to non-Christians. In fact, the percentage of Christians going bankrupt appears to be about the same as that of the population in general, although accurate statistics are not readily available. I do know that an informal survey in almost any local church reveals a percentage approximating the national average.
Need Cash Quick Cash? Cash-In-24 Hours.com!
The Federal Bankruptcy Act deals with four types of bankruptcy. These bankruptcy options are identified by the chapter in which they are outlined in the Bankruptcy Act. Two deal with corporate bankruptcy, and two deal with personal bankruptcy. Anyone considering bankruptcy action would be well advised to read the information in the appendixes on bankruptcy and then contact an attorney who specializes in this area.
Chapter 11 bankruptcy. This section of the bankruptcy code details how a corporation may file for federal bankruptcy protection and continue to operate while it works out a plan to repay the creditors. Normally a corporation has three years to repay the creditors the amount that a liquidation of the assets would have provided. If it fails to do so, it faces the possibility of total dissolution under chapter 7 of the code.
When a company files for chapter 11 protection, the creditors have a right to petition the court to dissolve the company and distribute the available assets. If the judge agrees, the company is abolished and sold to satisfy the debts.
If the judge grants a chapter 11 reorganization to the company, he can require the creditors to accept reduced or deferred payments and set aside all interest charges if he feels it is in the best interest of the company's survival.
