Filing For Bankruptcy

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There is a bankruptcy court for every judicial district in the United States. Every state in the country has one or more districts. There are ninety bankruptcy districts in the United States. The bankruptcy courts usually have their own clerk's offices.


The court official with the power to make decisions over federal bankruptcy cases is the bankruptcy judge of the United States and a district court judicial officer of the United States. The bankruptcy judge may pick any matter that is connected with a bankruptcy case, such as the eligibility to file or whether or not a debtor ought to have his/her debts discharged. Much of the process of a bankruptcy is administrative and is conducted away from the courthouse. In cases of bankruptcy under chapters seven, twelve, or thirteen, and sometimes in chapter thirteen cases, this administrative process is carried out by a appointed trustee to overlook the bankruptcy case.

A debtor's involvement is usually limited with the bankruptcy judge. A typical chapter seven debtor won't appear in the courtroom and won't face the bankruptcy judge unless an objection is raised in the bankruptcy case. A chapter thirteen debtor may only have to appear in front of the bankruptcy judge at a plan confirmation hearing. Usually, the only formal proceeding at which a debtor must show up is for the meeting of creditors, which is normally held at the U.S. trustee office. This meeting is informally called a "three-forty-one meeting" because section forty of the United States Bankruptcy Code requires that the debtor attend this meeting so that creditors can query the debtor about his/her property and debts.

Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934). This goal is accomplished through the bankruptcy discharge, which releases the debtor from his/her personal liability from specific debts and prohibits creditors from ever taking any action against the debtor to collect those debts.

Personal bankruptcy is mostly thought about as a last resort option to debt management because the results are far reaching and long lasting. Whoever follows the rules will get a bankruptcy discharge, which is a court order that says they don't have to repay certain debts. However, bankruptcy information such as the date of your bankruptcy filing and the date of discharge will stay on your credit file for ten years, and can make it difficult to get credit, buy a house, get life insurance, or sometimes get a job. Still, bankruptcy is a legal procedure that offers a fresh start for individuals who have fallen in to financial issues and are unable to satisfy their debts.

Their are six basic types of bankruptcy cases that are provided under the Bankruptcy Code. There are 2 primary types of personal bankruptcy which are a Chapter Thirteen and a Chapter Seven filing. Each must be filed in the federal bankruptcy court. Since April of 2006, the filing fees run about two hundred seventy four dollars for a Chapter Thirteen filing and two hundred and ninety nine dollars for a Chapter Seven filing. The cost of hiring a attorney are additional and can vary.

Effective October of 2005, Congress made sweeping changes to the United States bankruptcy laws. The point of these changes is to give consumers more incentive to seek bankruptcy relief under a Chapter Thirteen rather than filing a Chapter Seven. A Chapter Thirteen filing allows people with a steady income to keep property, like a mortgaged home or a automobile, that they might otherwise lose through the bankruptcy process. In a Chapter thirteen bankruptcy, the court approves a repayment plan that allows you to use your future income to pay off your debts during period of 3 to 5 years, rather than surrender any property. Once you have made all the payments under the bankruptcy plan, you will receive a discharge of your debts.


Chapter Seven is known as straight forward bankruptcy, and involves the liquidation of all assets that are not exempt. Exempt property may include automobiles, work-related tools, and basic household furnishings. Some of your property may be sold by a court-appointed official — a trustee — or turned over to your creditors. The new bankruptcy laws have changed the time period during which you can receive a discharge through Chapter Seven. You now must wait eight years after receiving a discharge in Chapter Seven before you can file again under that chapter. The Chapter Thirteen waiting period is much shorter and can be as little as 2 years between filings.

Both a Chapter 7 and 13 bankruptcy can stop foreclosures and eliminate unsecured debts, garnishments, repossessions, debt collection activities, and the shut-off of utilities. Either bankruptcy types provide exemptions that allow the debtor to keep certain assets, although the exemption amount varies by state. However, you should be aware that personal bankruptcy doesn't usually eliminate alimony, child support, taxes, fines, and certain student loan obligations. Also you know that unless you have a plan that is approved to catch up on your debt under a Chapter Thirteen, then the bankruptcy will not usually allow you to keep property when your creditor has an unpaid security lien or mortgage on it. Another change that was major to the bankruptcy laws involves certain hurdles that a consumer must clear before even filing for bankruptcy protection, no matter what chapter you decide to file. You must get credit counseling from a approved government organization within 6 months before you file for any bankruptcy relief. You can find a list of government-approved organizations by state at www.usdoj.gov/ust. That is the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees. Also, before you file a Chapter Seven bankruptcy case, you must satisfy a means test which requires you to confirm that your income does not exceed a certain amount. This amount varies by each state and is publicized by the United States Trustee Program at www.usdoj.gov/ust.

Learn More On Counseling And Education Requirements Before Claiming Bankruptcy



The Six Types Of Bankruptcy

Below you will find more information on the six types of bankruptcy. This information includes the process, alternatives, eligibility, discharge and where to find forms.

Chapter Seven Bankruptcy, entitled Liquidation, contemplates an orderly, court-supervised procedure by which a trustee takes over the assets of the debtor's estate, reduces them to cash, and makes distributions to creditors, subject to the debtor's right to retain certain exempt property and the rights of secured creditors.

Chapter 9, entitled Adjustment of Debts of a Municipality, provides essentially for reorganization, much like a reorganization under chapter 11. Only a "municipality" may file under chapter 9, which includes cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts.

Chapter Eleven Bankruptcy, entitled Reorganization, ordinarily is used by commercial enterprises that desire to continue operating a business and repay creditors concurrently through a court-approved plan of reorganization.

Chapter Twelve Bankruptcy, entitled Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income, provides debt relief to family farmers and fishermen with regular income.

Chapter Thirteen Bankruptcy, entitled Adjustment of Debts of an Individual With Regular Income, is designed for an individual debtor who has a regular source of income. Chapter 13 is often preferable to chapter 7 because it enables the debtor to keep a valuable asset, such as a house, and because it allows the debtor to propose a "plan" to repay creditors over time, usually three to five years.

Chapter Fifteen Bankruptcy, entitled Ancillary and Other Cross-Border Cases, is to provide an effective mechanism for dealing with cases of cross-border insolvency.

Learn more on the difference between a Chapter 7 and 13 Bankruptcy.

More information on How To File For Bankruptcy.

Learn about Life After Bankruptcy.

You may want to also read Statute Of Limitations Law on old past due debt

Find out how to Negotiate with creditors to reduce old debts

Although all information has been written in good faith and reviewed, please email us at help@consumerbadcreditguide.com to report any inaccuracies.