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What is the primary goal of bankruptcy?

A fundamental goal of the federal bankruptcy laws enacted by Congress is to give debtors a financial "fresh start" from burdensome debts.

What is an unsecured priority claim?

Priority unsecured claims are claims that are not secured by collateral but that have priority over other debts under federal law: Examples include alimony, child support, restitution, and administrative claims. The specific classes of priority claims are set forth in the Bankruptcy Code.

How long is a Chapter 11?

This period usually lasts for six to twelve months. During this period, however, it may be necessary to pay secured creditors and creditors whose property, goods, or services are needed to continue the debtor's business. 23. How does a Chapter 11 case proceed after it has been filed?

What are unsecured liabilities with priority?

Car loans, mortgages, and tax liens are "secured debt" guaranteed by property the creditor can take if you don't pay. Support obligations, new tax debt, and employee wages are examples of "unsecured priority debts," and they're so important they get paid before other debts.

What does it mean to exit Chapter 11?

Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor's business affairs, debts, and assets, and for that reason is known as "reorganization" bankruptcy. It is most often used by large entities, such as businesses, though it is available to individuals as well.

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