Bankruptcy Reform Act of 1978

A major overhaul of previous bankruptcy law in the United States. The Act forms the basis for how bankruptcies have been conducted ever since. The Act provides for three main types of bankruptcy. Chapter 7 provides for liquidation of a business and discharge of debts. Chapter 11 allows corporations to continue operations after reorganization. Chapter 13 restructures debt but does not forgive it. See also: Bankruptcy Abuse Prevention and Consumer Protection Act, Bankruptcy and Insolvency Act.

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