Question

In your own words what is a copyright? What benefits does it provide?

3) What are the differences between Chapter 7 and Chapter 11 bankruptcy? What sort of protections does each offer the entrepreneur?

In your own words what is a copyright? What benefits does it provide?

Answer 1

1. Copyright refers to the legal rights of the owner over his/her work. It prevents duplication and using of the work without the creators consent. The author can allow a third party to use the work for a consideration under certain conditions. If a third party uses a copyright protected work without the permission of the copyright holder then the third party can be sued for copyright infringement.

Both published and unpublished work can be copyright protected and copyright exists the moment the work is created and need not be registered.

Benefits of copyright –

Ø Exclusive ownership over the work.

Ø The work will be publicly published.

Ø Copyright provides legal ownership over the work.

Ø Copyright registration validates ownership to prevent future challenges to the rights to the work.

Ø Copyright holder is entitled to statutory damages and attorneys’ fees in case of infringement.

2. There are 4 types of bankruptcy filings in the Federal Bankruptcy Code -

Ø Chapter 7 - Liquidation

Ø Chapter 11 - Reorganization (or Rehabilitation bankruptcy)

Ø Chapter 12 - Adjustment of Debts of a Family Farmer with Regular Annual Income

Ø Chapter 13 - Adjustment of Debts of an Individual with Regular Income

Difference between Chapter 7 and Chapter 11 Bankruptcy

Chapter 7	Chapter 11
It is known as liquidation bankruptcy.	It is known as reorganisation bankruptcy.
Certain assets of the debtors are sold.	No assets of the debtors are sold.
A trustee is appointed to oversee the securing of the debtor's assets, the liquidation (sale) of the assets and the repayment of creditors in the order of priority (secured debts repaid first).	A trustee is appointed to work with the debtor to develop a repayment plan for all outstanding loans.
The debt may be forgiven to the extent that the sale of assets does not cover all loans.	The debt is not forgiven but the terms of the loan are changed.
Can be filed by individuals and business entities.	It is more often filed by businesses.

Chapter 7 lets an entrepreneur to wipe out both personal and business debt in a single filing. And even though the personal assets will be included in the bankruptcy estate, some or all the assets can be exempted.

Chapter 11 allows the business to continue to operate while paying off the debts. The automatic stay keeps the creditors from continuously for repayment. It also gives the freedom to restructure secured debts by spreading the payment for a longer period.