How other Countries Deal with Bankruptcy
The United States isn’t the only country which uses bankruptcy laws for its people and firms. Several countries have their own versions of bankruptcy that differ a bit from each other. In the United States of America almost any person, business, and frequently municipalities can seek bankruptcy relief. Other countries alter from this stance.
Australia
Australia employs the Bankruptcy Act of 1966. This governs all filings of bankruptcy and reaches individuals only. A debtor can file for bankruptcy in three various forms. The first being Part IV which handles Full Bankruptcy, Part IX which relates to Debt Agreements, and Part X which is about Personal Insolvency Agreements. Businesses will not belong to bankruptcy but instead are liquidated or administration.
Brazil
In Brazil the bankruptcy laws are almost entirely different from those in Australia as bankruptcy is only available to companies. Private companies are the only ones who are able to file for bankruptcy. Public companies are not eligible for bankruptcy. There are three different forms of proceedings. The first proceeding deals with bankruptcy, this works similarly to the U.S. version of Chapter 7 for businesses where the main goal is to liquidate and pay off creditors. The second form is known as Judicial Recuperation, this is similar to Chapter 11 of the U.S. where the main goal is to maintain operations and employment of staff while paying back debt. The third form is Extrajudicial Recuperation. This involves private negotiations between the debtor and creditors on how to pay off debt which is then approved by judicial powers.
Canada
Bankruptcy in Canada is managed by federal powers. It encompasses both individuals and companies. An individual or company is faced with bankruptcy whenever they can no longer sustain their payments to creditors. An bankruptcy alternative comes in the shape of consumer proposals. This involves individuals working out payment plans with a creditor in which they decide to repay debt in a period of time, usually Five years. These plans can only be filed whenever a debtor’s debt does exceed $250,000. If the debt exceeds this amount the plan is required to be filed under Division 1 Part III of the Superintendent Bankruptcy and Insolvency Act.
China
Bankruptcy in China falls under three chapters, Chapters 8, 9, and 10. Chapter 8 refers to reorganization plans. Chapter 9 is about exemptions and Chapter 10 is about liquidations.
United Kingdom
The modern idea of bankruptcy came from England within the Middle Ages and as a result the U.K. has similar regulations and rules as the U.S. The U.K. bankruptcy rules cover both individuals and partnerships. Companies fit in 1 of 2 categories, liquidation and administration.
United States
Though various countries have their own unique bankruptcy laws the USA has perhaps one of the most comprehensive set of bankruptcy laws and chapters. These chapters being Chapter 7, 9, 11, 12, 13, and 15. Chapters 7, 11, and 13 are offered to most people and in many cases businesses. Chapter 7 discusses liquidation for individuals and businesses, should a business apply for this all company functions cease. Chapter 11 allows for businesses and, sometimes, individuals with a large amount of debt to retain power over assets and produce a reorganization plan in order to pay off any debt. Chapter 13 is much like Chapter 11 but is specifically for individuals with manageable debt. Chapter 12 is for farmer and fisherman families only. Chapters 9 and 15 are certainly not qualified for businesses or individuals as they pertain to municipalities, Chapter 9, and ancillary and international cases, Chapter 15.
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