Bankruptcy Law and Procedures

Debtor

someone who owes debts and seeks protection or relief under bankruptcy laws

Creditor

a person or entity to whom money is owed

Trustee

appointed to oversee the bankruptcy case, ensuring the debtor assets are distributed to creditors

Bankruptcy law

The debtor starts the bankruptcy by filing a petition with the U.S bankruptcy court and selecting the appropriate type of bankruptcy

Bankruptcy law

is exclusively federal law and bankruptcy cases may only be filed in specialized federal bankruptcy courts

Automatic stay

halts all credit collectors

Dischargeable

debtor remains responsible for the debt even after the bankruptcy case is closed

Bankruptcy estate

debtors' property at time of filing, gifts, inheritance, life insurance, and divorce settlement

Exempt

compensation earned after filing, homestead exemption, motor vehicles up to 4K, government benefits

Chapter 7

liquidation bankruptcy, quickest form, creditors are paid in order of priority, non-exempt property is sold for cash, median test, means test, discharge

Acts that bar discharge

lying, transferring, concealing, removing, or destroying property, destroying records, refusing to answer questions, refusing post-petition counseling

Chapter 13

you do have the steady income to pay off the creditors, pay a monthly note, 3-5 years, keep all assets

Chapter 11

businesses, filed by corporations wanting to reorganize their capital and discharge portion of their debt