Bankruptcy Law Essay Example | Topics and Well Written Essays - 500 words

Bankruptcy Law - Essay ExampleEach case merchant ship file any of these types of bankruptcy, however, a specific chapter may be better suited for each individual case.Chapter 11 is mainly bankruptcy for line of products and its economic consumption is to reorganize the debt of the business. Reorganization divides the credit accounts into different classes and assets are then liquefied and distributed. The debitor can devise a computer program of reorganization for the approval of the royal court within a 120-day deadline or the debtor can request a court appointed trustee to plan the reorganization. This chapter of bankruptcy allows the business to continue to die during the bankruptcy under the supervision of Bankruptcy Court. Chapter 11 allows for liquidation of the business assets that are not immediately needed for the operation of the business and a plan for payment of the assets needed for the operation of the business. This will allow the sole proprietor in this case to stay in business and she can change her business to a more suitable and profitable business under the supervision of the court while at the same time eliminating the majority of her debt.In this case, the debtor should file chapter 7 bankruptcy. The debtor is assigned a trustee who liquidates assets and then divides the proceeds fairly among the creditors.