BANKRUPTCY ASSISTANCE

The Federal Bankruptcy Law Explained

Bankruptcy is a legal right that all citizens have.  The federal bankruptcy law allows people a legal remedy to handle their debt when it gets out of their control.  Bankruptcy is not a solution to every problem and it is not an easy fix for debt problems. 

Federal bankruptcy law has become more strict since the passing of the new laws in 2005.  Federal bankruptcy law now makes it more difficult for people to have all their debt erased under bankruptcy.  More bankruptcies filed are repayment options and not discharge of debts.

Filing A Case Under Federal Bankruptcy Law

A bankruptcy case must be filed in a bankruptcy court.  They can not be filed in state court.  There are 94 districts in the country set up under the federal bankruptcy law and each district has a bankruptcy court.  You must file in the proper court.

Where to Find the Federal Bankruptcy Law

Federal bankruptcy law is established under Title 11 of the united States Code.  This is commonly referred to as the Bankruptcy Code.  There are many different types of bankruptcy that can be filed.  They are called Chapters.  The most common Chapters are Chapter 7, Chapter 11 and Chapter 13. 

Both individuals and businesses can file for bankruptcy.  There are special Chapters of bankruptcy for different situations.  It is important to file under the correct Chapter to assure that your bankruptcy is approved.

How Federal Bankruptcy Law Works

The federal bankruptcy law gives individuals and businesses the chance to get out of debt through liquidating their assets and wiping out debts.  Sometimes all debt will be wiped out and no assets will be liquidated.  In some cases assets will be liquidated and a debt repayment plan will be set up with creditors to remedy debt.

To file bankruptcy a person must file paperwork with the bankruptcy court.  Before filing the new federal bankruptcy law requires credit counseling.  Once counseling is complete the counseling certificate and the paperwork for the bankruptcy are completed.  Hearings will be held to liquidate assets and discharge the debts.  Before the bankruptcy is finalized there is another required credit counseling course that must be taken.

The outcome of a bankruptcy largely depends on your personal situation and if the paperwork was filed correctly and completely.  Debt may be wiped out, paid back through liquidation or a payment plan may be set through the court.  Whatever the outcome, the ultimate goal of bankruptcy is to help you get back on your feet financially.