What Is Bankruptcy?
Bankruptcy is a legal process through which debtors may be able to discharge debt. The process is administrated by the Federal courts. Typically, the process involves a judge and a court trustee looking through a person or entity’s finances, analyzing assets and liabilities to determine whether those debts may be discharged.
Where Does Bankruptcy Law Come From?
The source of United State Bankruptcy Law is Title 11 of the United States Code (11 U.S.C.). Consequently, bankruptcy is a sect of Federal Law. Federal Bankruptcy Courts have exclusive jurisdiction over bankruptcy cases.
Who Can Declare Bankruptcy?
There are six (6) types of bankruptcy contemplated by Title 11, each of which is governed by a specific chapter. Those chapters are:
- Chapter 7 – basic liquidation for individuals and businesses
- Chapter 9 – municipal bankruptcy (debt resolution for towns/cities)
- Chapter 11 – rehabilitation and reorganization for business debtors and certain individuals
- Chapter 12 – rehabilitation for family farmers and fishermen
- Chapter 13 – rehabilitation with payment plan for individuals who have a regular source of income
- Chapter 15 – ancillary and international bankruptcies
What Happens Once You File for Bankruptcy?
Typically, after the filing of a bankruptcy petition, the first thing that happens in a bankruptcy proceeding is the scheduling of a “meeting of the creditors” (also known as a 341 meeting). The meeting of the creditors is an opportunity for creditors to review the petition and its supporting documents, and to challenge any exemptions they believe improper.
Got A Bankruptcy Question?
Attorney Chris Mutchler may be able to help. Get in touch with The Law Office of Christopher J. Mutchler. If we can’t help you, we’re more than happy point you in the direction of someone who can!
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