Welcome to Bankruptcy Guide
Bankruptcy Law Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Understanding Bankruptcy Law
from: Deb St. George - HomelessInKingCounty.comLike any legislation, bankruptcy law is complex which is why you should begin the process by consulting with an attorney. In a nutshell, the purpose of the law is to help individuals and businesses resolve their inability to pay their debts. Simply stated the bankruptcy court looks at all of your assets and liabilities, allows certain exemptions and then divides the net assets among the creditors. Of course, it’s never that simple because everyone’s situation is different and complications can occur at any stage.
The purpose of the bankruptcy law is to give honest people a way to get out of debt and start over again. The law does not help those who think they can simply avoid a debt they want to eliminate for whatever reason. This is an important distinction to understand. Filing bankruptcy is a serious decision with long reaching consequences on your credit, but for millions of people it is also a law that offers hope for a fresh start financially.
The bankruptcy law was revised in October 2005 largely in response to claims by creditors that it was too easy for people to claim bankruptcy just to avoid paying their bills. But if you are in serious financial trouble and cannot honestly pay your debts then the new bankruptcy law’s more stringent filing requirements will not delay your bankruptcy.
The bankruptcy law has many different sections that address both individual and business bankruptcies. The law’s intent is to distribute certain assets after statutory exemptions are excluded and then use the proceeds to pay off as much creditor debt as possible. The court determines which creditor gets what amount. All bankruptcies must go through federal district court, though each state has laws concerning the payments to creditors. This is just another example of why you need a bankruptcy attorney.
The bankruptcy law established “chapters” which merely indicates the kind of bankruptcy being filed. Chapter 7 is the one used most frequently by individuals. A court appointed trustee oversees the identification and selling of non-exempt assets and the use of the proceeds to pay debts. In reality, because assets such as a house and car may be exempted, there is often no asset liquidation required. Chapter 11 is used by large corporations that are reorganizing and need to restructure debt in order to survive. There is also a chapter 12 used by farmers and chapter 13 used by individuals asking for a court established and monitored repayment plan.
For individuals filing chapter 7 there are many different aspects to the law which can impact the final result. The law will not allow you to cancel some debts such as child support. The really good news is that you will not lose your home if your debt meets the rules for determining exempt equity. The same is true for your car. You are also allowed to retain cash accounts as long as the sum total does not exceed $10,000. The courts have recently ruled that retirement accounts like IRA’s are also exempt.
It’s easy to see that the new bankruptcy law has many complex provisions, but the goal of these statutes is to give you an honest chance to start over without a heavy debt burden. Your bankruptcy attorney will assist you throughout the entire process.
Bankruptcy Law News
Greenberg Traurig Expansion Continues in California with the Addition of ... - MarketWatch (press release)
Greenberg Traurig Expansion Continues in California with the Addition of ... MarketWatch (press release) Steinberg and his team were recently the recipients of the 2012 International Financial Law Review Deal of the Year Award for their representation of RIM in connection with a $4.5 billion patent portfolio purchase in the Nortel bankruptcy. |
Del. judge disgusted with bankruptcy trust secrecy - Legal News Line
 Legal News Line | Del. judge disgusted with bankruptcy trust secrecy Legal News Line In one of her bankruptcy trust submissions, however, she claimed exposure through her employment at Samuel Ward Manufacturing in Boston. Florida law, which governed the Delaware case, allows juries to apportion percentages of liability to ... |
Bankruptcy Law and Inheritance - JD Supra (press release)
Bankruptcy Law and Inheritance JD Supra (press release) by Tampa Bay Bankruptcy Center, PA on 5/22/2012 If you receive an inheritance, what does the bankruptcy law say about it? More specifically, if you are given an inheritance after you file for bankruptcy what happens to it? The bankruptcy code has ... |
Law Student's Debt Forgiven Over Asperger's Syndrome - MyFox Memphis
 MyFox Los Angeles | Law Student's Debt Forgiven Over Asperger's Syndrome MyFox Memphis (NewsCore) - A Maryland woman will not have to pay back over $300000 in student loans after a bankruptcy judge ruled her debilitating Asperger's syndrome permits the cancellation of her education debt, The National Law Journal reported. Law School Dropout Gets Student Debt Wiped Out Because of Asperger Syndrome |
Trader with 'Scattered' History Sees Another Company into Chapter 11 - Wall Street Journal (blog)
Trader with 'Scattered' History Sees Another Company into Chapter 11 Wall Street Journal (blog) That decision affirmed a bankruptcy court's refusal to confirm a Chapter 11 plan in which net operating losses, sometimes used to offset future taxes, were the bankrupt company's primary asset, according to law firm Jones Day. |
Issue of Harrisburg filing for bankruptcy still a point of contention - CBS 21
Issue of Harrisburg filing for bankruptcy still a point of contention CBS 21 This number has been growing over the past year as the city has been unable to file for bankruptcy. In June of last year, the state legislature passed a law amending the state's fiscal code to prohibit financially distressed cities from entering into ... |
UAE set to approve new bankruptcy law by end-2012 - Justice Min - Reuters
 MENAFN.COM | UAE set to approve new bankruptcy law by end-2012 - Justice Min Reuters DUBAI May 14 (Reuters) - The United Arab Emirates is close to finalising an updated federal bankruptcy law and a draft of the legislation should be ready by the end of this year, Justice Minister Hadef bin Juan al-Dhaheri said on Monday. Bankruptcy law may be in place by end of the year New bankruptcy law to ensure legal sustainability Key UAE laws by year-end |