Chapter 7

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Chapter 7 of Title 11 of the United States Code (short chapter 7 ) is the portion of US bankruptcy law ( English Bankruptcy code ) of the process of liquidation of the remaining assets of a debtor organized. It is applicable to both companies and individuals and is the counterpart to Chapter 9 , Chapter 11 and Chapter 13, which set the rules for a reorganization . The application for liquidation is also referred to in America as to file under chapter 7 . It is the most commonly used form of American bankruptcy law.

description

The procedure according to the US Bankruptcy Code for opening insolvency proceedings for liquidation and reorganization is similar despite the different objectives and initially distinguishes between two case variants:

In the first case, insolvency proceedings according to Chapter 7 or 11, in the case of private individuals also according to Chapter 13, can be carried out after a voluntary application by the debtor ( voluntary case ). The initiation of proceedings in a voluntary case does not require the existence of sufficient insolvency assets to cover the costs of the proceedings, nor does an actual insolvency or arithmetical overindebtedness have to have occurred. Nevertheless, the procedure must not be initiated against good faith or in an improper manner. The commencement of a case begins with the filing of the application and the payment of the corresponding fees to a bankruptcy court . Natural persons must have previously taken an additional 180 days of debt counseling. When the voluntary application is submitted, both debtors and creditors are subject to the order for relief , ie the legal consequences of insolvency proceedings: the application establishes the bankruptcy estate and declares it as a special estate . At the same time, a moratorium ( automatic stay ) prevents unilateral actions against the debtor, e.g. B. lawsuits, enforcement, termination of existing contracts or the realization of real rights. It is intended to prevent one believer from gaining an advantage over another. The Chapter 7 procedure also requires the immediate appointment of a preliminary insolvency administrator. His duties include calling a meeting of all creditors with unsecured claims , which will determine the ultimate liquidator. This takes over the bankruptcy estate with the aim of satisfying the creditors according to their rank from the realization of the remaining assets.

As an alternative to the voluntary application, a procedure in accordance with Chapter 7 or 11 can also be enforced at the request of creditors ( involuntary case ). Normally, this requires the applications of three creditors with unsecured claims in a minimum amount (as of April 2019: 15,775 US dollars). Only if the debtor is obliged to less than twelve creditors is a debtor's application sufficient. This procedure also results in the declaration of the bankruptcy estate as a special estate and an enforcement ban ( automatic stay ). In contrast to the voluntary procedure, the order for relief for the debtor is only issued after a court decision, after the debtor has been given the opportunity to object.

The US Bankruptcy Law is generally considered to be debtor-friendly. The majority of insolvency applications are made by debtors, while the number of creditor applications is low in relation to German law. One reason for this is that the judicial rejection of a creditor's application may threaten the applicant with high claims for damages. In the American legal area, bankruptcy is regarded as economic normality in the broadest sense. Compared to the European area, it is therefore less associated with social exclusion for the debtor. For commercial debtors, filing for insolvency is therefore often one of the commercial strategies, especially under Chapter 11. However, the vast majority of corporate insolvencies are under Chapter 7. Even with consumers, the majority of debtor filings are under Chapter 7.

literature

  • United States Bankruptcy Code (2019 Edition) . Michigan Legal Publishing, Grand Rapids, Michigan, ISBN 978-1-64002-054-2 .

Web links

Individual evidence

  1. a b c d Michael Heese: Information for creditors in insolvency: a comparative study of US and German law to improve the protection of creditors in insolvency proceedings (=  publications on procedural law . Volume 56 ). Mohr Siebeck , Tübingen 2008, ISBN 978-3-16-149738-4 .
  2. ^ A b Georg F. Thoma, Rainer Wilke: Legal foundations of corporate restructuring . In: Ulrich Hommel, Thomas Knecht, Holger Wohlenberg (Hrsg.): Manual corporate restructuring: Basics - Concepts - Measures . Gabler Verlag , Wiesbaden 2006, ISBN 978-3-409-12654-0 , p. 99-128 .
  3. 11 US Code, §303 ; the exposure value is regularly adjusted to the development of the cost of living index.
  4. Tilman Engel: The bankruptcy and option-based reorganization models . Deutscher Universitäts-Verlag , Wiesbaden 2004, ISBN 978-3-8244-8128-6 , p. 101 .
  5. a b Caseload Statistics Data Tables. Table F2: US Bankruptcy Courts — Business and Nonbusiness Cases Filed, by Chapter of the Bankruptcy Code — During the 12-Month Period Ending March 31, 2019 . In: US Courts . Administrative Office of the US Courts. Retrieved July 5, 2019.