7/29/2019 Bankruptcy Law - An Outline

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Bankru pt cy Law - An Ou t l ine

Bankrupt cy law is the govern ing law s that say what happens in the bankrup tcy process, who

can f i le w hat t ype of bankrup tcy and every oth er det a i l invo lved in f i l ing bankrupt cy. I t is

imp or tant t hat you are ser ious w hen f i l ing bankrupt cy and that you m ake sure your com plete ly

understand t he process.

An Establishm ent of Bankrup tcy Law

The United Bankrupt cy Code is the law th at regulat es and establishes bankrupt cy. This is a

federa l law and bankrup tcy is he ld in federa l bankrup tcy cour t s. Federa l bankruptcy judges hear

bankru pt cy cases.

States get involved on some level w i th t he pro cess. Each state h as one or m ore bankru ptcy

cour ts to hear res ident cases. Addi t ional ly , exem pt ions are establ ished u nder federa l law, b utstat es a lso have exem pt ions t hat can be chosen instead of the federa l exempt ions.

Variat ions of Bankru pt cy Law

There are m any var iances in the bankrupt cy law s that can be confusing. Here are som e top

th ings you should know about :

Exem pt ions - Exem pt ions are assets th at are pro te cted. You w il l have a feder al l ist and a stat e

l ist . You have to choose one or t he oth er . The idea is to go w i th t he one t hat pro tects the m ost

of yo ur assets.

Di f ferent typ es of bankrup tcy - There are m any d i f ferent t ypes of bankruptcy. Ind iv iduals

usual ly e ithe r f i le Chapter 7 or Chapter 13. In any case i t is im por t ant t o un derstand th e

di f ference. You a lso have to m ake sure th at you qual i fy for t he chosen t ype under t he new laws.

The New Bankrupt cy Laws

New laws were designed to help reduce t he num ber of bankru ptc ies being f i led and to help

preven t abu se of t he syste m . These new laws m ade several changes.

One of th e best know n changes is the n ew requirem ent o f credi t counseling. This is done t w ot im es dur ing the pro cess. The f i rst t im e is to help a person m ake sure t hey should f i le

bankruptcy and that an a l ternat ive is not a bet t er so lut ion. The second session helps the person

to b e a bet ter consumer and learn about be ing responsib le w i th credi t .

Anoth er m ajor change is the l im i ta t ion on w ho can f i le Chapter 7. This l imi t a t ion m akes a

Chapter 7 b ased on income. Those m aking too m uch have to f i le a Chapter 13.