Chapter 15 Bankruptcy
Chapter 15 is a chapter in the Bankruptcy Code in the United States that caters to a foreign debtor and allows foreigners to file for bankruptcy in a particular country. Chapter 15 was included in the Bankruptcy Code in 2005, it facilitates a friendly environment for the settlement of international insolvencies.
The enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act allowed for the inclusion of this Chapter. Chapter 15 facilitates the relationship between U.S courts and foreign courts. With Chapter 15, a foreign debtor is allowed to access courts in other countries and file for bankruptcy.
A Little More on What is Chapter 15 Bankruptcy
Although Chapter 15 is not a popular chapter in the bankruptcy law, it focuses on jurisdiction. Chapter 15 aid the cooperation of U.S courts and foreign courts in handling international bankruptcy proceedings. this chapter also makes filing for bankruptcy easier for foreign debtors. A foreign debtor can access the US bankruptcy courts in order to protect the value of their assets and resolving issues surrounding the debts. Chapter 15 has certain clear objectives, they include;
- Enhancing cooperation between U.S courts, foreign courts and parties involved in international insolvencies.
- Protecting the value of a debtor’s assets.
- Creating financial assistance for insolvent companies and rescue them is possible.
Chapter 15 Adoption
Chapter 15 portrayed U.S’ adoption of the United Nations Commission on Internation Trade Law (UNCITRAL) which was the model law for other international trade laws. Chapter 15 was included in the United States Bankruptcy Code in 2005 to handle cases relating to financial insolvencies. Aside from the United States, other countries have adopted Chapter 15 into their Bankruptcy laws, such countries include Mexico, Japan and Canada.
Chapter 15 History
Prior to the official inclusion of Chapter 15 in the United States in 2005, provisions of this chapter originated from Section 304 of the U.S. Bankruptcy Code. This Chapter is contained in Title 11 of the United States Code enacted in 1978. The U.S Bankruptcy Code had different sections that catered for different bankruptcy issues, Section 304 of the Code was repealed in 2005 and thereafter replaced with Chapter 15.
Reference for “Chapter 15”