What are the principal goals and aims of bankruptcy?
The purpose of bankruptcy is to provide a forum for a financially troubled debtor to deal with all his, her or its creditors in a single unified proceeding, and a mechanism to satisfy creditors’ claims. For a business, the goal of bankruptcy is either to provide an orderly liquidation of the debtor and its assets or to reorganize. For an individual, the goal of bankruptcy is to get his or her debts wiped out. The Bankruptcy Code provides for a “discharge” of debts — which is the elimination of the individual debtor’s personal liability for his or her pre-bankruptcy debts (subject to certain exceptions discussed below). The discharge of debt is intended to give the debtor a fresh start.
The purpose of bankruptcy is to provide a forum for a financially troubled debtor to deal with all his, her or its creditors in a single unified proceeding, and a mechanism to satisfy creditors’ claims. For a business, the goal of bankruptcy is either to provide an orderly liquidation of the debtor and its assets or to reorganize. For an individual, the goal of bankruptcy is to get his or her debts wiped out. The Bankruptcy Code provides for a “discharge” of debts — which is the elimination of the individual debtor’s personal liability for his or her pre-bankruptcy debts (subject to certain exceptions discussed below). The discharge of debt is intended to give the debtor a fresh start.
