US Bankruptcy Law
Bankruptcy is a procedure whereby an individual legally proclaim himself that he is incapable of paying his outstanding debts and liabilities. Title 11 of the United States Code is popularly referred to as the Bankruptcy code though many other provisions relating to bankruptcy are found in other parts of the United States Code such as Title 18- which deals with bankruptcy crime, Title 26- tax implication in relations with bankruptcy Title 28- judicial process and jurisdiction of bankruptcy courts etc.
Bankruptcy cases should be filed in Bankruptcy Courts. There is several type of proceeding that comes under the general bankruptcy. There are multiple chapters in Title 11, which provides the relative procedures available for debt resolution. Chapter 7 relate to Liquidation, which is the popular form of bankruptcy. This involves in appointing of a trustee, who get details of the properties of the debtor, sells it and allots the proceeds to the creditors.
Chapter 9 deals with reorganization of Municipalities. Chapter 11, 12 and 13 deals with an advanced stage of reorganization, whereby the debtor is allowed to keep some or all of his assets and to make use of the future earnings from the assets thus kept with him to pay off creditors. Chapter 15 deals with cross border insolvency which was inserted by an amendment in 2005 replacing section 304.
First you should recognize your alternatives before choosing the chapter of bankruptcy on which you are going to file. Bankruptcy should not be a sudden decision without weighing the situation in hand. It is more often the costs of bankruptcy prevail over the pros; therefore it is a very, very personalized decision and ought to be measured cautiously.
The Chapter 7 dealing with bankruptcy can be illustrated as a liquidation procedure. The applicant’s negligible part of property and asset is exempted from the proceedings, but the remaining assets including the landed property if any will be under the custody of the bankruptcy trustee, either to be sold and the proceeds to be distributed amongst your creditors. Still, there may exist, some debts which cannot be paid off or discharged but even then the applicant for liquidation will be free from all dischargeable debts within a short span of time since the filing for bankruptcy application. This facilitates the person who sought for liquidation a fresh opening for future life, moreover it can be a great break for those with heavy debts which otherwise had gone unmanageable.
Chapter 13 Bankruptcy is meant for those who want to reorganize their debt. In other words, the person who applies under Chapter 13 instead of chapter 7 bankruptcy can keep his non-exempt property. You can file invoking chapter 13, bankruptcy, only if your income is sufficient so that you can afford your expenses or living cost and at the same time can assign a portion of it to pay off the debt covered under chapter 13, bankruptcy.
Before a decision, bare in mind that there is plethora of information regarding bankruptcy and by surveying all avenues you can come across information that fits you correctly or is squarely applicable to you and then consult your attorney before a final decision.
