Many types of laws exist to address common issues faced by people. These issues may be broad and general in their scope while others address more specific matters. One type of law that addresses the general area of bankruptcy is referred to as bankruptcy law. This area of law addresses issues concerning consumer, business, and all other forms and means of bankruptcy.
Bankruptcy law consists mostly of statutes and bills or opinions of federal judges based on previous bankruptcy cases. The United States federal government has jurisdiction over all bankruptcy matters. Given that bankruptcy can happen to people, businesses, corporations, and other entities, different types of bankruptcy law apply to specific entities.
Most businesses, companies, and corporations are subject to Chapter 11 bankruptcy in contrast to private individuals who have the option of filing for Chapter 7 or 13 bankruptcies. A party who owns a bankrupt business has several options as to what kind of bankruptcy code he or she will choose to file. Chapters 11 and 13 of the same bankruptcy code involve reorganization of a debtor rather than liquidation as provided for by Chapter 7. When a business, either a partnership or corporation, files for Chapter 7, it dissolves as a legal entity. When an individual files for the same form of bankruptcy, he or she receives a Chapter 7 discharge.
A person or entity seeking to file bankruptcy charges must file the appropriate documentation in the proper bankruptcy court. It must be proven that the person or entity filing can no longer manage to pay debts.