What is the act of bankruptcy in Nigeria?

The basic law regulating bankruptcy in Nigeria is the Bankruptcy Act Cap B2 LFN 2004. A person, organization or state who can no longer meet his financial obligations would naturally need to be bailed out of his financial distress.

What are the four main types of bankruptcy?

In fact, there are six different types of bankruptcies:

  • Chapter 7: Liquidation.
  • Chapter 13: Repayment Plan.
  • Chapter 11: Large Reorganization.
  • Chapter 12: Family Farmers.
  • Chapter 15: Used in Foreign Cases.
  • Chapter 9: Municipalities.

What are the qualifications of bankruptcy?

Who Qualifies for Chapter 13 Bankruptcy?

  • You must have sufficient income to make the monthly debt payments outlined in your bankruptcy plan.
  • Your unsecured debts (such as credit cards and medical bills) must be less than $419,275, and your secured debts (like mortgage and car payments) must be less than $1,257,850.

Is there any punishment for bankruptcy?

They shall be punished with imprisonment for not less than one year but may extend to five years. The fine shall be not less than ₹ 1 lakh but may extend to ₹ 1 crore or with both the imprisonment and fine.

What is the difference between bankruptcy and insolvency?

Bankruptcy is a legal process or court order, while insolvency is a state of financial distress. Bankruptcy is a type of insolvency, but there are others. Bankruptcy isn’t the only way out of insolvency. Bankruptcy applies only to individuals and sole traders with unlimited liability.

What debts are not discharged in bankruptcy?

Examples of other non-dischargeable debts in a Chapter 7 bankruptcy case include:

  • 401k loans.
  • Other government debt such as fines and penalties.
  • Restitution for criminal acts.
  • Debt arising from fraud or false pretenses.
  • Debts you intentionally did not include in your bankruptcy forms.
  • Damages related to a DUI accident.

What do you lose when you file bankruptcy?

Filing Chapter 7 bankruptcy wipes out most types of debt, including credit card debt, medical bills, and personal loans. Your obligation to pay these types of unsecured debt is eliminated when the bankruptcy court grants you a bankruptcy discharge.

What is one of the most common reasons for bankruptcies?

Following is a list of the most common causes of bankruptcy in America today.

  1. Medical Expenses. A study done at Harvard University indicates that this is the biggest cause of bankruptcy, representing 62% of all personal bankruptcies.
  2. Job Loss.
  3. Poor/Excess Use of Credit.
  4. Divorce/Separation.
  5. Unexpected Expenses.

What happen if you declare bankruptcy?

If you’re struggling financially, bankruptcy gives you the opportunity to pay down a portion of your debts over time or have some of them eliminated entirely. Either way, declaring bankruptcy grants what’s called an automatic stay, which is essentially a block on your debt to keep creditors from trying to collect.