Bankruptcy law is a federal statutory law contained in title 11 of the United States codes. Congress passed the Bankruptcy Code under its Constitutional grant of the authority to establish a uniform law on the subject of bankruptcy throughout United States. States may not regulate bankruptcy though they may pass the laws that govern other aspects of the debtor-creditor relationship.
Bankruptcy allows a debtor, who is unable to pay his creditors to resolve his debts through the division of his assets among his creditors. Certain bankruptcy proceedings allow a debtor to stay in business and use the revenue generated to resolve his or her debts. A United States Bankruptcy court supervises bankruptcy proceedings and is where bankruptcy is litigated. Proceedings in bankruptcy courts are governed by the Bankruptcy Rules which were promulgated by the Supreme Court under the authority of Congress.
How Do Bankruptcy Proceedings Work?
Informally called "straight bankruptcy," The most common type of bankruptcy proceedings liquidation involves the appointment of a trustee who collects the non-exempts property of the debtor, sells it and distributes the proceeds to the creditors.
Chapter 11 is reorganization. In this chapter the debtors are allowed to continue its operations while paying their debts. The debtor can either enter the bankruptcy proceedings or it can be initiated by the creditors. The creditors may not seek to collect their debts outside the proceedings at the most part, after the bankruptcy proceedings is filed. The latest revisions of the bankruptcy law are now in effect. Before the debtor can file a bankruptcy case, they should undergo credit counseling, budgeting and debt managements before the debt is wiped out.
Bankruptcy Attorney – Choosing the Right One
Bankruptcy attorneys explain the applications of bankruptcy laws and its applications. If the debtors or their lawyers set off the bankruptcy it is called a voluntary bankruptcy. If the courts initiate the bankruptcy it is called an involuntary bankruptcy. A good bankruptcy attorney will take all the problems away from the bankrupt person or company and deal with every aspect of the bankruptcy.
6 Helpful Tips and Considerations For Finding the Best Bankruptcy Attorney
1. Find a bankruptcy lawyer at the circle of your acquaintances. Keep in mind that bankruptcy law is a specialty, so if your lawyer offers to handle the case as part of your usual retainer, make sure he knows his way around a bankruptcy court.
2. Attorneys must be certified by the American Bankruptcy Institute.
3. Spend a day at a bankruptcy court.
4. What time frame do you have for this bankruptcy?
5. How much access will I have to an attorney during my bankruptcy filing?
6. Because bankruptcy law is a volume business, the time you’ll actually be working with a specific attorney may be small. Don’t hire the cheapest lawyer.