What is Bankrupcy and how to deal with Creditors and Lenders
Article I, Section 8, of the United States Constitution authorizes Congress to enact “uniform Laws on the subject of Bankruptcies.” Under this grant of authority, Congress enacted the “Bankruptcy Code” in 1978.
The Bankruptcy Code, which is codified as title 11 of the United States Code, has been amended several times since its enactment. It is the uniform federal law that governs all bankruptcy cases.
The procedural aspects of the bankruptcy process are governed by the Federal Rules of Bankruptcy Procedure (often called the “Bankruptcy Rules”) and local rules of each bankruptcy court. The Bankruptcy Rules contain a set of official forms for use in bankruptcy cases. The Bankruptcy Code and Bankruptcy Rules (and local rules) set forth the formal legal procedures for dealing with the debt problems of individuals and businesses.
There is a bankruptcy court for each judicial district in the country. Each state has one or more districts. There are 90 bankruptcy districts across the country. The bankruptcy courts generally have their own clerk’s offices.
The court official with decision-making power over federal bankruptcy cases is the United States bankruptcy judge, a judicial officer of the United States district court. The bankruptcy judge may decide any matter connected with a bankruptcy case, such as eligibility to file or whether a debtor should receive a discharge of debts. Much of the bankruptcy process is administrative, however, and is conducted away from the courthouse. In cases under chapters 7, 12, or 13, and sometimes in chapter 11 cases, this administrative process is carried out by a trustee who is appointed to oversee the case.
A debtor’s involvement with the bankruptcy judge is usually very limited. A typical chapter 7 debtor will not appear in court and will not see the bankruptcy judge unless an objection is raised in the case. A chapter 13 debtor may only have to appear before the bankruptcy judge at a plan confirmation hearing. Usually, the only formal proceeding at which a debtor must appear is the meeting of creditors, which is usually held at the offices of the U.S. trustee. This meeting is informally called a “341 meeting” because section 341 of the Bankruptcy Code requires that the debtor attend this meeting so that creditors can question the debtor about debts and property.
The Bankruptcy Process
Bankruptcy issues can be confusing and financial warning signs can grow into bigger problems quickly. That is why we lay out a timeline designed for your situation. From choosing the rightChicago bankruptcy attorney to rebuilding your credit after filing , we answer all your questions and can help you decide if filing bankruptcy is right for you
Chapter 7 Bankruptcy
Receive a fresh start by discharging all of your eligible debt.
Chapter 13 Bankruptcy
Individuals who can afford to pay some of their debt back can establish a repayment plan with Chapter 13 bankruptcy.
Chapter 11 Bankruptcy
Also known as “business reorganization bankruptcy,” Chapter 11 permits a company to set up a repayment schedule, allowing for the retention of professional relationships and continuation of business operations.
Chapters 9, 12, and 15: These chapters deal with bankruptcy options for farmers, fishermen, municipalities and cross-border cases.