Types of Bankruptcy

The video tutorial explains two main types of bankruptcy: liquidation and reorganization. Liquidation bankruptcy involves selling a debtor's assets to pay off debts, with remaining debts discharged. Reorganization bankruptcy allows individuals or businesses to restructure their debts over a period, typically three to seven years, while maintaining control of their assets. The process involves creating a bankruptcy estate and a plan to pay off secured and unsecured debts using available income. The goal is to enable continued operations and economic productivity.

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