Doney & Associates Home Page
 Doney & Associates
Bankruptcy Basics
Bankruptcy Judges Division
Administrative Office of the United States Courts
APRIL 2006
Revised Third Edition
For cases filed on or after October 17, 2005



The Discharge in Bankruptcy

Chapter 7. Liquidation Under the Bankruptcy Code

Chapter 13. Individual Debt Adjustment

Chapter 11. Reorganization Under the Bankruptcy Code

Chapter 12. Family Farmer Bankruptcy

Chapter 9. Municipality Bankruptcy

Chapter 15. Ancillary and Other Cross-Border Cases

SCRA. Servicemembers' Civil Relief Act

SIPA. Securities Investor Protection Act

Bankruptcy Terminology

Securities Investor Protection Act


Typically, when a brokerage firm fails, the Securities Investor Protection Corporation ("SIPC") arranges the transfer of the failed brokerage's accounts to a different securities brokerage firm. If the SIPC is unable to arrange the accounts' transfer, the failed firm is liquidated. In that case, the SIPC sends investors either certificates for the stock that was lost or a check for the market value of the shares. Brokerage firms may be liquidated under the Bankruptcy Code, however, if the SIPC does not file an application for a protective decree with the district court or if the district court finds that customers of the brokerage firm are not in need of protection under the SIPA. 15 U.S.C. 78eee.