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Only 4 bankruptcy cases filed in 2015
There were only four bankruptcy cases filed in the U.S. District Court for the NMI in 2016, according to court records.
The bankruptcy petitions filed were two Chapter 7s, a Chapter 11, and a Chapter 13. All cases were filed by individuals.
Under Chapter 7 bankruptcy, most assets of the debtor are liquidated as quickly as possible to pay off his or her creditors to the extent possible and to free the debtor to start anew.
Chapter 11 bankruptcy allows a debtor to enter into an agreement with creditors under which all or part of the business continues. Chapter 11’s objective is to adjust and reorganize a debtor’s obligations so as to allow the business to continue.
Under Chapter 13 bankruptcy, debtors propose a repayment plan to make installments to creditors over three to five years. Also known as reorganization bankruptcy, it enables individuals with regular income to develop a plan to repay all or part of their debts, according to U.S. courts.
In 2015, eight bankruptcy cases were filed in federal court, including that of the Tinian Dynasty Hotel & Casino.
The all-time highest record of bankruptcy cases in the CNMI was in 2005 when 31 cases were filed. One of the factors attributed to such a high number was because it was beginning that year when the Bankruptcy Abuse Prevention and Consumer Protection Act took effect. The act increased the filing fee and made bankruptcy petitions stricter, among other things.
