Those who have never had any encounters with
bankruptcy law may assume that the courts are predisposed to act in the
interests of creditors, and thus, are against debtors. However, this is not the case.
After all, the very fact that bankruptcy laws exist in the United
States are emblematic of the fact that the government is not interested in
feeding insolvent parties to the lions, in a manner of speaking.
Courts of bankruptcy law, in theory, are
designed to be balanced in representing all sides in proceedings, and whether a
judge’s discretion significantly impairs this balance is up to judgment in and of itself. Some notes on bankruptcy courts’ stated goals
with regard to bankruptcy laws in the United States:
Keeping with the theme of bankruptcy
law as an emblem, American bankruptcy laws are perhaps the
perfect example of a “second chance” as far as the law in this
country goes. As of result of proceedings in a bankruptcy court, everyday
people may be allowed to wipe their debts away for good, getting them out of a
situation that otherwise would have had
them struggling to stay afloat for years more or just would not have been
possible to manage by virtue of the numbers game.
As students of bankruptcy
law understand, there are several specific chapters of the Bankruptcy
Code. Bankruptcy laws have not just been
written to protect average Americans, though. However, especially when the
failures of companies may affect tens, hundreds, and thousands of people, the
idea that corporations may also apply for assistance in overcoming insolvency
is paramount. Courts of bankruptcy law extend the same choices of
liquidation and reorganization to businesses facing failure.
As noted, bankruptcy laws are supposed to
work in the best interests of all with an interest in the case. This includes creditors who may not be able to get
100% back on their investments, but may still recoup a satisfactory amount of
what they were legally owed. Through the workings of bankruptcy law, creditors
with valid claims may be able to get a portion of what they are entitled to in
regular installments from debtors through the officers of the court.
Then again, the United States is obviously
not the only maker of bankruptcy laws in the world, as such a fate may
befall anyone in any land. In such instances, Chapter 15 of the Bankruptcy Code comes into play.