Bankruptcy

High school (ages 12+)
People & Society

Name:

Date:

Step 1 · Read the article

Open the article and read it at the level above. Then answer the questions below in your own words.

https://smallwhale.org/articles/bankruptcy

Write what each word means, using the article.

Do not copy the article. Write two things you learned, the way you would explain them to a friend.

Answers below are taken from the article’s stored facts, so they match what the student read.

1. What is the key legal mechanism?The automatic stay immediately halts most creditor collection efforts upon filing
2. What is bankruptcy and why does it exist?Bankruptcy is a legal way to help people or businesses who can't pay their debts. It gives them a fresh start and a fair way to pay creditors.
3. How do the different chapters of bankruptcy work?Chapter 7 sells some assets to pay creditors. Chapter 13 lets people repay over 3-5 years. Chapter 11 helps businesses reorganize and keep working.

Insolvency: A state where liabilities exceed assets, or the inability to pay debts as they become due.
Exempt Property: Assets that a debtor is legally allowed to keep during a bankruptcy proceeding.
Reorganization Plan: A detailed proposal in Chapter 11 bankruptcy outlining how a business will restructure its debts and operations.