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Bankruptcy Law

Bankruptcy law involves the procedure or legal method by which a debtor is relieved of financial liability for its debts by establishing a court-approved reorganization plan or plan for partial repayment. The purposes of bankruptcy laws are to give honest, financially insolvent individuals and debtors of commercial enterprises relief from indebtedness. In the U.S., two proceedings of bankruptcy include liquidation under Chapter 7 and debtor rehabilitation, or the process of planning reorganization and repayment of debts under Chapters 9, 11, 12 and 13. In some countries only individuals can become bankrupt.  Insolvent companies either go into liquidation, examinership or administration.