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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.
Corporation Filing Bankruptcy News
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) “Greenblatt, [H&M Oil & Gas's] manager, purported CFO and principal, has a long history of misusing corporate formalities and the bankruptcy system for his own gain,” Prospect said in documents filed with the US Bankruptcy Court in Dallas. |
Gingrich's private ventures are going bankrupt - Reuters
 CNBC.com | Gingrich's private ventures are going bankrupt Reuters "How did it go from a 2011 tax return that seemed like everything was up to date and three months later it filed bankruptcy?" Desmond replied that corporate members who were attracted to Gingrich as a policy promoter were worried about getting caught ... Newt Gingrich's Private Ventures Are Going Bankrupt |
Hancock Fabrics at a Crossroads - Memphis Daily News
Hancock Fabrics at a Crossroads Memphis Daily News It hasn't issued a dividend in the past six years, and last month, the company said it was indefinitely suspending dividends. At least one research company is concerned about the future of Hancock Fabrics, which filed for bankruptcy protection in 2007 ... |
Ford regains assets, including blue logo, after credit upgrade - CBS News
 USA TODAY | Ford regains assets, including blue logo, after credit upgrade CBS News Ford never stopped using its logo or factories, but posted them as collateral in 2006 in order to get a $23.5 billion loan and avoid bankruptcy. Executive Chairman Bill Ford, the great grandson of company founder Henry Ford, said Tuesday that giving up ... Moody's boosts Ford's credit rating Ford to get blue oval back after second upgrade |
What is Samsung doing to Nokia? - NASDAQ
What is Samsung doing to Nokia? NASDAQ Like Nokia Corporation, Novell was partnered up with Microsoft Corporation ( MSFT , quote ). Wang Computers could not find a buyer and filed for bankruptcy in 1992. Alcatel-Lucent, another tech train-wreck in the mobile industry , is now under $1.50 a ... |
Houghton Mifflin Harcourt Publishing Files for Bankruptcy - San Francisco Chronicle
 mediabistro.com | Houghton Mifflin Harcourt Publishing Files for Bankruptcy San Francisco Chronicle The company, based in Boston, listed $2.68 billion in assets and $3.53 billion in debt in Chapter 11 documents filed today in US Bankruptcy Court in Manhattan. More than 20 affiliates also entered bankruptcy, including Broderbund LLC and Classroom ... Boston publisher Houghton Mifflin files for bankruptcy TEXT-Fitch cuts Houghton Mifflin Harcourt IDR to 'D' Houghton Mifflin Harcourt Officially Files for Bankruptcy |
Beware of Debtors Bearing Gifts: Eleventh Circuit Upholds TOUSA Bankruptcy ... - JD Supra (press release)
Beware of Debtors Bearing Gifts: Eleventh Circuit Upholds TOUSA Bankruptcy ... JD Supra (press release) Six months later, TOUSA and the Conveying Subsidiaries filed for bankruptcy. As part of the bankruptcy case, the Committee of Unsecured Creditors (Committee) challenged as a fraudulent conveyance the grant by the Conveying Subsidiaries of collateral to ... Eleventh Circuit reverses TOUSA district court decision and holds lenders ... |