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bankruptcy. 1. A statutory procedure by which a (usu.

insolvent) debtor obtains


financial
relief and undergoes a judicially supervised reorganization or liquidation of the
debtor's assets for
the benefit of creditors;
There are two general forms of bankruptcy: (1) liquidation and (2) rehabilitation.
Chapter 7
of the Code is entitled �Liquidation.�
Chapters 11, 12, and 13 of the Bankruptcy
Code contemplate debtor rehabilitation.

Trustee A person appointed by the U.S. Trustee or elected by creditors or appointed


by
a judge to administer the bankruptcy estate during a bankruptcy case. A
trustee is appointed or elected in every Chapter 7 case, and is appointed in every
Chapter 12 and
Chapter 13 case under the Bankruptcy Code. A trustee is not appointed or elected in
a Chapter 11
case unless the court finds that a trustee is needed and appoints one. In most
Chapter 11 cases, the
bankruptcy estate is administered by the debtor in possession, rather than by a
trustee.

Chapter 7. 1. The chapter of the United States Bankruptcy Code allowing a trustee
to collect
and liquidate a debtor's nonexempt property, either voluntarily or by court order,
to satisfy
creditors.

Chapter 9. 1. The chapter of the United States Bankruptcy Code governing the
adjustment of
a municipality's debts.

Chapter 11. 1. The chapter of the United States Bankruptcy Code allowing an
insolvent
business, or one that is threatened with insolvency, to reorganize its capital
structure under court
supervision (and subject to creditor approval) while continuing its normal
operations.

Chapter 12. 1. The chapter of the United States Bankruptcy Code providing for a
court-approved debt-payment relief plan for family farmers with a regular income,
allowing a
farmer's net income to be collected by a trustee and paid to creditors.

Chapter 13. 1. The chapter of the United States Bankruptcy Code allowing a person's
earnings to be collected by a trustee and paid to creditors by means of a court-
approved
debt-repayment plan if the person has a regular income.

C corporation.A corporation whose income is taxed through it rather than through


its
shareholders. � Any cor-poration not electing S-corporation tax status under the
Internal Revenue
Code is a C corporation by default.
S corporation.A corporation whose income is taxed through its shareholders rather
than
through the corporation itself. � Only corporations with a limited number of
shareholders can elect
S-corporation tax status under Sub-chapter S of the Internal Revenue Code.

corporation,n. An entity (usu. a business) having authority under law to act as a


single person
distinct from the shareholders who own it and having rights to issue stock and
exist indefinitely;