Party in Interest

Party in Interest

Bankruptcy, which is outlined by laws in the United States Bankruptcy Code, allows a debtor, who has debt obligations which have exceeded their ability for repayment, to terminate contractual debt obligations with their creditors, potentially develop a plan of debt payment reorganization and avoid litigation. The goal is to allow the debtor a fresh financial start while distributing the debtor's remaining assets to creditors as equitability as possible. Bankruptcy can be a voluntary or involuntary process forced on the debtor by their creditors.

Parties of interest can include:

• Debtor - the debtor can be an individual, business, married couple, partnership or corporation which owes another entity payment for goods or services.
• Creditors - the creditor can be any entity which has a claim or debt owed to them which occurred prior to the debtor filing the bankruptcy petition.
• United States Trustee - The United States Trustee is part of the Department of Justice and they are responsible for making sure the bankruptcy process is performed according to United States bankruptcy laws.
• Equity Security Holders - Equity Security holders can include shareholders of corporate stock who have a stock or similar security in the corporation or who are a limited partner in a limited partnership.
• Trustee - A trustee is assigned by the bankruptcy court to represent the interests of the creditors in the bankruptcy process. In Chapter 7 Bankruptcy proceedings the trustee will liquidate the debtor's non-exempt assets and use the money to repay the creditors. In a Chapter 13 Bankruptcy process the trustee administers the Chapter 13 Bankruptcy repayment schedule.