Bankruptcy

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Author:
Eddie Tobey

As far back as colonial times, every citizen has a constitutional right to file for bankruptcy. By declaring bankruptcy, one is relieved of mandatory collection activities for debts existing at the time of filing by a legal "stay" on these activities. The first version of US bankruptcy or Federal Insolvency laws appeared in 1800, and has been evolving ever since.

Chapter 7 or "straight liquidation" bankruptcy permits the retention of exempt assets and property and can be used by individuals, partnership businesses and corporations. Under Chapter 7, recent tax obligations, debts to government units and alimony/child support are not exempt. In case of debts incurred during a marriage, both spouses must file for bankruptcy – otherwise the debts are transferred to the non-filing spouse.

Chapter 13, or "wage earner reorganization" bankruptcy can only be filed by individuals who have a steady source of income. It can be filed by debtors with unsecured debts that do not exceed $100,000 and secured debts that do not exceed $350,000. Basically, filing for Chapter 13 bankruptcy indicates an intention and willingness to make good one’s debts within five years. With this understanding, the applicant’s existing assets are not liquidated.

Chapter 11 is a more flexible version of Chapter 13 available to individuals and businesses. It is generally not preferred by individuals, because it entails greater court-related expenses and calls for frequent personal appearances in court.

Once Chapter 7 bankruptcy has been legally sanctioned, creditors have no claim on future income. If assets have been concealed, misrepresented or surreptitiously transferred at the time of filing for bankruptcy, the discharge from debts can be either refused or declared null and void.

Bankruptcy provides detailed information about bankruptcy, bankruptcy attorneys, bankruptcy faqs, and more. Bankruptcy is affiliated with New Bankruptcy Laws.

	Wed 10 Mar 2010 10:55:05 CST |
	Wed 10 Mar 2010 10:55:05 CST |
	Wed 10 Mar 2010 10:55:05 CST |
	Wed 10 Mar 2010 10:55:05 CST |

A Quick Note From The Publisher... If you like the article above, you may be interested in the following article which is also related to Bankruptcy... Credit After Bankruptcy - Rebuilding Takes Responsibility What’s the real reason behind bankruptcy? Are easy credit cards to blame? Good enough, credit after bankruptcy can be rebuilt over again once a debtor receives his discharge. Yet, it could still take several years before one can get back decent interest-rates on a credit card, mortgage, or car loan, and debtor cannot spoil credit after bankruptcy – not this time. It could take another 8 long-years before a person can file for another personal bankruptcy. There’s a good reason why the current bankruptcy law requires filers to undergo a financial-management or credit-counseling course. This rule not only places emphasis on debtors avoiding bankruptcy, but also helps debtors learn how to manage their credit and debt in the future. The bankruptcy record could stay in a person’s credit statements until 10years; and if the ex-bankrupt ever wishes to buy a $150,000-house or get a $75,000-job then the bankruptcy note could hang about for the record, and with the up-to-date record-keeping technologies used by credit-agencies, the bankruptcy record could settle – forever. So what else could be done about credit after bankruptcy? It’s still possible to get credit again. (If someone’s that good in filing bankruptcy then he must also be good with credit.) Banks and mortgage or credit institutions have become better at cooperating with people who have gone through a personal bankruptcy. They now hand ‘secured’ credit cards that the debtor (with deposit and guarantee) can use to begin his process of credit restoration. Within as-little-as 2 years banks can start giving regular credit again. It can’t be tarnished though. This time it’s a ‘secured credit’ – difficult for a next bankruptcy. The debtor must now ensure that his credit card billing-statements include information on how...