Chapter 10 bankruptcy – your protection
So just what is Chapter 10 bankruptcy? This is a tiny clause in the Bankruptcy Act that can protect you from harassment and buy you time when you most need it. According to the US Bankruptcy Code, this chapter will permit a small company to avail of the court’s protection until they can work out a plan to extricate themselves from their financial impasse.
Chapter 10 bankruptcy is designed to aide small and micro entrepreneurs, who would otherwise lose their business to their creditors. Under this clause, the company will ask for a reasonable time during which they will draw up a realistic time and action plan to rebuild their financial base. If the Court find it acceptable, then the company will be offered protection under the Chapter 10 bankruptcy Act.
The main conditions imposed by Chapter 10 bankruptcy Act is that the company’s rejuvenating plans should not exceed three years or the total debt be more than US$2,500,000.00
