Chapter 11 business bankruptcy filings decreased by 139 in August to 842, a 14.2% decrease from the previous month, according to D&B Corp.'s monthly U.S. bankruptcy report.
Chapter 11 of the U.S. Bankruptcy Code was one of several bankruptcy classifications to decrease month-to-month. Chapter 11 bankruptcy enables a debtor to propose a plan of reorganization to keep its business and pay creditors over time.
Chapter 7 business bankruptcy filings decreased by 307 in August to 3,082, a decrease of 9.1% from the previous month, according to the Short Hills, N.J.-based provider of business information. Chapter 7 provides for the liquidation, or sale of a debtor's nonexempt property and the distribution of the proceeds to its creditors.
Chapter 13 filings totaled 927 in August, a 5% decrease compared with 976 in July. Chapter 13 of the Bankruptcy Code is available for individuals with regular incomes whose debts do not exceed specific amounts, and debtors typically use such filings to budget some of their future earnings under a plan through which unsecured creditors are at least partially paid back.
Fourteen businesses filed for Chapter 12 bankruptcy protection in August, seven less than in July. Chapter 12 is designed for family farmers or fishermen with regular annual income to propose a plan to repay all or part of their debts.