The US bankruptcy court is a federal court that administers the bankruptcy code. The USA Constitution authorizes Congress to create bankruptcy laws that are uniform, and a major law was passed in 1978. This uniform set of laws that were created were called the Bankruptcy Code. Naturally the laws have been changed or amended over the years, and the newest bankruptcy laws were enacted in October 2007.
Like any government institution, the US bankruptcy court has many codified procedures it must follow. The procedures are called Bankruptcy Rules and that is where you will find the rules related to handling individual and business debts. The rules are complex and cover a variety of different kinds of bankruptcies. But even with 6 types of bankruptcies called “chapters”, each bankruptcy is unique in its own way. That is why you should let an attorney handle your bankruptcy so that all of your rights are protected and you are assured of getting the best bankruptcy filing possible for your situation.
The US bankruptcy court will probably never be seen by most people filing a chapter 7 or chapter 13. In order to keep the court dockets cleared for more complicated cases and to prevent case backlogs, the court appoints a trustee to each bankruptcy case. The court has a bankruptcy judge who works for the district court system, but odds are you will only work with the trustee and your attorney. In fact, many times chapter 11 and chapter 12 cases are held outside the court too.
Of course, a creditor is given an opportunity to object to the discharge of the debt owed. In the case of chapter 7, most of the time the creditor who shows up at the trustee hearing represents the mortgage company. If you don’t have a house then there’s a good chance you will not hear any objections from creditors.
If you file a business bankruptcy and have creditors who want to take issue with your repayment plan then you might have to go to court. Also, a judge determines whether you will be allowed to file a chapter 7 or 13 in individual bankruptcy. If you are told you have to file a chapter 13, but are not happy with that decision, then you can appeal to the court by proving you have special circumstances that justify the chapter 7 filing.
Many individual bankruptcy filings are actually quite simple, but not all of them. The US bankruptcy court has all of the decision making power, but the goal is to give you a fresh start and free from as much debt as allowed under the law. Though you many not want to file bankruptcy, it is a good thing the US Constitution recognized that people can incur debt that gets out of hand. As a result of our forefather’s vision and understanding of human nature, you can find debt relief in a number of ways.
Filing a personal bankruptcy is a major decision and one that only you can make. It’s no secret that it can have long term consequences on your credit. But the question to ask yourself is whether those consequences are better or worse than the consequences of debt spiraling out of control. It doesn’t take long for people to discover that debt only gets worse when ignored.
A personal bankruptcy is called “personal”, because it applies to an individual and not a business. It’s also very personal, because the bankruptcy is structured to meet your particular circumstances. But having said that it’s also necessary to recognize that there are specific laws that define bankruptcies in terms of what’s allowed and not allowed. For personal bankruptcies, you can file a chapter 7 for liquidation or a chapter 13 for a repayment plan.
A personal bankruptcy can do some things to help people deal with their debt, but there are other things outside its realm of control according to law. For example, a personal bankruptcy cannot erase all types of debt. These debts include child support, court ordered payments and criminal fines. The attorney will negotiate with the IRS to determine which tax debts can be eliminated. Also, any debt you create after the bankruptcy is not grandfathered into the order. On top of that, a creditor can make you give up any collateral you used to secure debt instead of just accepting payments.
The good news is that a personal bankruptcy can do lots of great things to make your life easier and give you a new start. Excessive debt feels like you’re carrying hundreds of pounds around on your shoulders all the time. Filing a bankruptcy takes most of that weight off.
There are plenty of good results you will experience as a result of filing bankruptcy. One of the best is the fact that most of your debts are discharged. That means you no longer have the debt and don’t have to pay it. A bankruptcy can prevent your house or car from being taken in a foreclosure or repossession. If you waited to file long enough to have your utilities turned off, they will probably be restored. There are other benefits too, and it is the job of your attorney to make sure you get the most financial relief allowed by the law.
Filing a bankruptcy can actually help your credit if your credit is already virtually ruined. That’s because a personal bankruptcy wipes out the debt you owe and lets you start again with a clean slate. If you work and save money and make timely payments on remaining debts, in all likelihood you will be able to begin rebuilding your credit within a few months of the final bankruptcy discharge.
A personal bankruptcy can remain on your credit history for 10 years. You cannot file another bankruptcy for 4 years on a chapter 7 and for 8 years on a chapter 13. Filing a bankruptcy is a long term decision with near term benefits. A bankruptcy attorney can help you start over again with a new financial life.
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