The Canada Emergency Business Account (CEBA) will provide interest-free loans of up to $40, to Canadian small businesses and not-for-profits. Français The Government of Canada launched CEBA to ensure that small businesses have access to the capital they need to see them through the current challenges, and better position them to quickly. Jan 19, · Chapter 13 bankruptcy is a reorganization bankruptcy typically reserved for individuals. It can be used for sole proprietorships since sole proprietorships are indistinguishable from their owners. Chapter 13 is used for small businesses when a reorganization is the goal instead of liquidation. Jan 22, · The WEPP was enacted in Canada to ensure payment of certain liabilities owed to the former employees of a company that is bankrupt or subject to a receivership. The WEPP charges the Canadian receiver or trustee in bankruptcy with the responsibility for determining wages, vacation pay, termination pay and severance pay owed to former employees.
Related videosBankruptcy and Insolvency - It's Not As Bad As You Think.
Following the introduction of the Enterprise Act , a UK bankruptcy now normally last no longer than 12 months, and may be less if the Official Receiver files in court a certificate that investigations are complete. It was expected that the UK Government's liberalization of the UK bankruptcy regime would increase the number of bankruptcy cases; initially, cases increased, as the Insolvency Service statistics appear to bear out.
The UK bankruptcy law was changed in May , effective May 29, The Government have updated legislation to streamline the application process for UK bankruptcy. The process for residents of Northern Ireland differs - applicants must follow the older process of applying through the courts. Bankruptcy in the United States is a matter placed under federal jurisdiction by the United States Constitution in Article 1, Section 8, Clause 4 , which empowers Congress to enact "uniform Laws on the subject of Bankruptcies throughout the United States".
Congress has enacted statutes governing bankruptcy, primarily in the form of the Bankruptcy Code, located at Title 11 of the United States Code. A debtor declares bankruptcy to obtain relief from debt, and this is normally accomplished either through a discharge of the debt or through a restructuring of the debt. When a debtor files a voluntary petition, their bankruptcy case commences. District Courts , bankruptcy cases, particularly with respect to the validity of claims and exemptions, are often dependent upon State law.
Certain real and personal property can be exempted on "Schedule C"  of a debtor's bankruptcy forms, and effectively be taken outside the debtor's bankruptcy estate. Bankruptcy exemptions are available only to individuals filing bankruptcy. There are two alternative systems that can be used to "exempt" property from a bankruptcy estate, federal exemptions  available in some states but not all , and state exemptions which vary widely between states.
For example, Maryland and Virginia, which are adjoining states, have different personal exemption amounts that cannot be seized for payment of debts. After a bankruptcy petition is filed, the court schedules a hearing called a meeting or meeting of creditors , at which the bankruptcy trustee and creditors review the petitioner's petition and supporting schedules, question the petitioner, and can challenge exemptions they believe are improper. An important feature applicable to all types of bankruptcy filings is the automatic stay.
The most common types of personal bankruptcy for individuals are Chapter 7 and Chapter Chapter 7, known as a "straight bankruptcy", involves the discharge of certain debts without repayment. Chapter 13 involves a plan of repayment of debts over a period of years. Whether a person qualifies for Chapter 7 or Chapter 13 is in part determined by income. Before a consumer may obtain bankruptcy relief under either Chapter 7 or Chapter 13, the debtor is to undertake credit counseling with approved counseling agencies prior to filing a bankruptcy petition and to undertake education in personal financial management from approved agencies prior to being granted a discharge of debts under either Chapter 7 or Chapter Some studies of the operation of the credit counseling requirement suggest that it provides little benefit to debtors who receive the counseling because the only realistic option for many is to seek relief under the Bankruptcy Code.
Often called "straight bankruptcy" or "simple bankruptcy", a Chapter 7 bankruptcy potentially allows debtors to eliminate most or all of their debts over a period of as little as three or four months. In a typical consumer bankruptcy, the only debts that survive a Chapter 7 are student loans , child support obligations, some tax bills, and criminal fines.
Credit cards, pay day loans, personal loans, medical bills, and just about all other bills are discharged. In Chapter 7, a debtor surrenders non-exempt property to a bankruptcy trustee, who then liquidates the property and distributes the proceeds to the debtor's unsecured creditors. In exchange, the debtor is entitled to a discharge of some debt. However, the debtor is not granted a discharge if guilty of certain types of inappropriate behavior e.
Some taxes are not discharged even though the debtor is generally discharged from debt. Many individuals in financial distress own only exempt property e. Chapter 7 relief is available only once in any eight-year period. Generally, the rights of secured creditors to their collateral continues, even though their debt is discharged.
For example, absent some arrangement by a debtor to surrender a car or "reaffirm" a debt, the creditor with a security interest in the debtor's car may repossess the car even if the debt to the creditor is discharged. Ninety-one percent of US individuals who petition for relief under Chapter 7 hire an attorney to file their petitions.
To be eligible to file a consumer bankruptcy under Chapter 7, a debtor must qualify under a statutory "means test". The "means test" is employed in cases where an individual with primarily consumer debts has more than the average annual income for a household of equivalent size, computed over a day period prior to filing. If the individual must "take" the "means test", their average monthly income over this day period is reduced by a series of allowances for living expenses and secured debt payments in a very complex calculation that may or may not accurately reflect that individual's actual monthly budget.
If the results of the means test show no disposable income or in some cases a very small amount then the individual qualifies for Chapter 7 relief.
An individual who fails the means test will have their Chapter 7 case dismissed, or may have to convert the case to a Chapter 13 bankruptcy. If a debtor does not qualify for relief under Chapter 7 of the Bankruptcy Code, either because of the Means Test or because Chapter 7 does not provide a permanent solution to delinquent payments for secured debts, such as mortgages or vehicle loans, the debtor may still seek relief under Chapter 13 of the Code.
Generally, a trustee sells most of the debtor's assets to pay off creditors. However, certain debtor assets will be protected to some extent by bankruptcy exemptions. These include Social Security payments, unemployment compensation, limited equity in a home, car, or truck, household goods and appliances, trade tools, and books.
However, these exemptions vary from state to state. In Chapter 11 bankruptcy, the debtor retains ownership and control of assets and is re-termed a debtor in possession DIP. Upon meeting certain requirements e. If a specified majority of creditors do not vote to confirm a plan, additional requirements may be imposed by the court in order to confirm the plan.
Debtors filing for Chapter 11 protection a second time are known informally as "Chapter 22" filers. In Chapter 13, debtors retain ownership and possession of all their assets but must devote some portion of future income to repaying creditors, generally over three to five years. If the monthly income is less than the state's median income, the plan is for three years, unless the court finds "just cause" to extend the plan for a longer period.
If the debtor's monthly income is greater than the median income for individuals in the debtor's state, the plan must generally be for five years. A plan cannot exceed the five-year limit. Relief under Chapter 13 is available only to individuals with regular income whose debts do not exceed prescribed limits.
Secured creditors may be entitled to greater payment than unsecured creditors. In contrast to Chapter 7, the debtor in Chapter 13 may keep all property, whether or not exempt. If the plan appears feasible and if the debtor complies with all the other requirements, the bankruptcy court typically confirms the plan and the debtor and creditors are bound by its terms.
Creditors have no say in the formulation of the plan, other than to object to it, if appropriate, on the grounds that it does not comply with one of the Code's statutory requirements.
When the debtor completes payments pursuant to the terms of the plan, the court formally grant the debtor a discharge of the debts provided for in the plan. In , the number of insolvencies reached record highs in many European countries. The increase in the number of insolvencies, however, does not indicate the total financial impact of insolvencies in each country because there is no indication of the size of each case.
An increase in the number of bankruptcy cases does not necessarily entail an increase in bad debt write-off rates for the economy as a whole. Bankruptcy statistics are also a trailing indicator. There is a time delay between financial difficulties and bankruptcy.
In most cases, several months or even years pass between the financial problems and the start of bankruptcy proceedings. Legal, tax, and cultural issues may further distort bankruptcy figures, especially when comparing on an international basis.
Two examples:. The insolvency numbers for private individuals also do not show the whole picture. Only a fraction of heavily indebted households file for insolvency. Two of the main reasons for this are the stigma of declaring themselves insolvent and the potential business disadvantage. Following the soar in insolvencies in the last decade, a number of European countries, such as France, Germany, Spain and Italy, began to revamp their bankruptcy laws in They modelled these new laws after the image of Chapter 11 of the U.
Bankruptcy Code. Currently, the majority of insolvency cases have ended in liquidation in Europe rather than the businesses surviving the crisis. These new law models are meant to change this; lawmakers are hoping to turn bankruptcy into a chance for restructuring rather than a death sentence for the companies.
Technically, states do not collapse directly due to a sovereign default event itself. However, the tumultuous events that follow may bring down the state, so in common language we do describe states as being bankrupted.
Some examples of this are when a Korean state bankrupted Imperial China causing its destruction, or more specifically, when Chang'an 's Sui Dynasty war with Pyongyang Goguryeo in A. From Wikipedia, the free encyclopedia. Legal status. For the Phoenix album, see Bankrupt! Main article: History of bankruptcy law. See also: Australian insolvency law. Main article: Insolvency law of Canada. Main article: Consumer bankruptcy in Canada.
Main article: Bankruptcy in China. This section needs to be updated. Please update this article to reflect recent events or newly available information. December Main article: Insolvency and Bankruptcy Code. Main article: Insolvency law of Russia. Main article: South African insolvency law. Main article: Insolvency law of Switzerland.
Main articles: UK insolvency law , Liquidation , and Administration insolvency. Main article: Bankruptcy in the United States. This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. A treatise on the law and proceedings in bankruptcy.
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Default Insolvency Interest Interest rate. The clothing company favored by former first lady Michelle Obama has been closing some of its stores due to plunging sales over the years. Specifically, Drexler pointed out J. Crew raised prices and underwent expansion during years when consumers became more and more thrifty.
Sears Holdings has undergone trouble for a decade, with their sales continuing to decline. Like 99 Cents Only, they might be suffering from competition in the market. The retailer offering discount goods has found itself between a rock and a hard place, facing competition from companies like Dollar General, Dollar Tree, and Walmart.
The year-old company had tried to turn things around years prior. Although reporting positive same-store sales, 99 Cents Only is still losing a lot of money just like vitamin retailer, GNC. However, also in Q2 , GNC said it had declines in top-line and comparable sales as well as profits. In February , the company said it would sell 40 percent of the company to a Chinese pharma company.
The pharma company will manufacture, market, sell and distribute products in China. In May , the year-old pharmacy said its top-line sales for the past fiscal year fell 4. Extra store spaces were ripe for the taking, according to RetailDive.
This extra space was available as Walgreens tried to get a deal with Rite Aid but that fell through. A huge maternity retailer also had exec shakeups when things turned sour for them. Destination Maternity is huge in the maternity apparel industry with more than 1, stores according to RetailDive.
Its CEO left during a quarter last year when top-line sales fell over 7 percent. There was some light at the end of the tunnel — it saw a 40 percent increase in e-commerce comps. In March, the retailer said that top-line sales fell year over year. The Jacksonville-based discount department store has struggled with its sales but is seeing some glimmers of hope! Looks like we may not have to worry about our discount goods going away! At the beginning of the year, Stein Mart had announced it hired advisors to help turn the chain around.
In , 1, employees were laid off and a distribution center closed. Top-line sales dropped 0. RetailDive says the company is having a hard time making a turnaround. RetailDive says JC Penney investors are growing impatient with the slow progress. It had many other changes to its executive makeup including its CEO. Perhaps they should consider a change in offerings like Office Depot?
This includes more services rather than products. Investing in its service also includes the acquisition of IT firm CompuCom. Vitamin retailers do not seem to be doing too well — like GNC, Vitamin Shoppe has also struggled with its sales. But, also like GNC, it is strengthening its e-commerce business and has started offering a subscription service.
Despite this, the company has seen its top-line fall 8. RetailDive attributes the struggles seen by Vitamin Shoppe and GNC to lessening popularity of malls and supplement store competition. Vitamin Shoppe is hoping to turn things around with category expansion, events, delivery services, and more.
Fast fashion company Forever 21 filed for Chapter 11 bankruptcy on September 29, Not to fear, for Forever will still be operating in plenty of U. This bankruptcy announcement comes after reports indicated Forever 21 had to hire advisers to seek out private-equity support to refinance and restructure the company, says a September report in Business Insider.
Neiman Marcus tried a couple things that RetailDive said seemed to be paying off, but still its interest expenses are troublesome. Sources told the WSJ that the companies were in talks in March.
Bebe is another clothing store affected by declining interest in malls. Her ex-husband Manny Mashouf founded the company in RetailDive also attributes declining mall popularity and other retail challenges as negatively affecting Bebe. Bebe decided to attempt to stay afloat by moving away from the traditional retail space. Forbes said Bebe had stores at the end of Pier 1 said in a release that 60 percent of its goods are made in China.
Sears branched off in CheatSheet says one of these was the youthful Canvas brand aimed at fashion-forward consumers. Guitar Center has been in business for more than 50 years but seems like people are buying fewer and fewer guitars.
CheatSheet says its electric guitar sales dropped 36 percent from to Despite its financial troubles, the instrument retailer was planning on opening new stores and managed to avoid a crisis by doing an emergency loan negotiation. In an interview with Forbes, EVP of merchandising and e-commerce Michael Amkreutz says the company is in transition but still going quite strong.
Southeastern Grocers, which also runs Bi-Lo, faces competition by big-box stores like Walmart and Target and e-commerce like Amazon. Southeastern is based in Florida but operates stores in other southern states like Alabama, Georgia, Louisiana, Mississippi, North Carolina, and South Carolina in addition to its home state. Bloomberg reports that this includes Chapter 11 bankruptcy and selling off parts of the company. In order to save itself, Nine West has sold off its Easy Spirit brand and closed all of its stores except for a mere The Post says declining demand for ballet flats, sandals and heels have affected its sales.
They also announced that they would be closing one of their major operation centers to consolidate three locations into two. The department store noticed that their lowest-performing stores were the ones located inside or near malls. They project that by maintaining those stores and pulling out of the larger locations, they should be able to turn things around.
This company had been around for a whopping years! All good things must come to an end, however — or do they? Bon-Ton, an online retailer and department store, filed for bankruptcy in and was sold and liquidated. It announced in October that it relaunched its e-commerce site and will open select stores.
CheatSheet says they were able to be successful as they were in small towns with little competition. Amazon changed things for them. The wedding dress superstore faces operational and market challenges; it saw sales, earnings and margins drop according to RetailDive. They might have to find a new way to make a comeback like Bon-Ton. A common cause of bankruptcy is companies not keeping up with changing consumer habits. This is the case with Tops Market according to CheatSheet.
With more shoppers interested in non-traditional food retailers, falling food prices, and competition, Tops had to file for Chapter 11 bankruptcy. Shoppers can still visit Tops, however. The company is trying to appeal to the athletic shoe brand trend by changing its image from dress shoes to sneakers.
Cole Haan used to be owned by an athletic shoe company, Nike. Cole Haan had built sneaker comfort into its dress shoes. Originally when it filed for bankruptcy protection February , it was only planning to shutter 94 of its retail outlets.
That number has jumped to a whopping stores across the United States. Historically, Charlotte Russe stores have been housed in malls. As we all know, malls have been experiencing lower foot traffic. Charlotte Russe might be a victim of fewer patrons hitting the malls, changing consumer interests or both!
It was a staple store in any mall where girls bought jewelry, accessories, and got their ears pierced. CheatSheet said this indicated a bankruptcy might happen — and it did. It closed stores by May and plans to markets itself to potential buyers and investors. FullBeauty owns brands for plus-size men and women such as fullbeauty.
This is definitely a common reason retailers have linked to finance problems. FullBeauty, owned by Apax Partners, included this message to its lenders in The outdoor company faced problems with debt.
Its sale to Golden State Capital in saved it from bankruptcy. Nasdaq argues the brand has struggled to keep up with trends. Wonder if Bluestem Brands will try a merger? Bluestem Brands provides apparel, appliances, electronics, health, and beauty products.
Business Insider put the company on its list of at-risk companies. A press release on BusinessWire in June showed some decreasing numbers…. In this press release, Bluestem had reported its numbers.