What is the U.S. Bankruptcy Code?

The U.S. Bankruptcy Code is a federal law that allows individuals and businesses to get rid of their debt or reorganize it in a more manageable way. It sets the rules for bankruptcy proceedings in all 50 states, the District of Columbia, and federal territories of the United States. The Bankruptcy Code is located in Title 11 of the United States Code, and is divided into nine different parts. Each part contains different types of laws related to bankruptcy. Under the Bankruptcy Code, an individual or business can file bankruptcy to either liquidate their assets and discharge their debt or reorganize their debt and make payment terms more manageable. Depending on the type of bankruptcy that is filed, the individual or business may either keep some of their assets or creditors may receive a portion of the repayment on their debt. Under the Bankruptcy Code, individuals may file for Chapter 7 or Chapter 13 bankruptcy. Chapter 7 is for individuals who wish to liquidate their assets to discharge their debt. Chapter 13 is for individuals who wish to reorganize their debt to make payment terms more manageable. Businesses may file for Chapter 7, 11, 12, and 13 bankruptcy. The Bankruptcy Code is a federal law that establishes the rules for bankruptcy proceedings for individuals and businesses in Washington and across the United States. It allows individuals and businesses to get rid of their debt or reorganize it in a more manageable way.

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