Personal Bankruptcy

Bankruptcy has developed into an almost common-place name nowadays, occuring in the media and in your life in a number of other, more private, way since the global financial system crashed in the fall of 2008.  Despite it being a single word, it has many interpretations, regularly referring totype of Bankruptcy filed.  Bankruptcy itself is defined as the legal procedure dealing with debt problems of an individual or a company. Bankruptcy refers, specifically, to the filing of Chapter 11 Bankruptcy.  There are many types of Bankruptcy namely Chapter 7, Chapter 9, Chapter 11, Chapter 12, Chapter 13, and Chapter 15 however the majority of cases are filed under the three major chapters of Bankruptcy which are Chapter 7, Chapter 11, and Chapter 13.

Only Someple of these are related directly to the individual, many relate to a company and one even relates to the government.  Chapters 7, 11, 12, and 13 refer to the first section.  Chapters 7, 9, 11, and 12 refer to the second section and Chapter 9 refers solely to the third section.  Please note that this only refers to the bankruptcy practices in the United States of America and it should not be assumed that these practices transfer over to other nations.  There are also several exceptions in the states of North Carolina and Alabama.

An individual would file for any Chapter Bankruptcy by filing a petition at the bankruptcy court that serves the area where the entity lives.  Also the individual would also need to file their schedules of assets and liabilities, a schedule of current income and expenditures, a statement of financial affairs, and a schedule of excretory contracts and unexpired leases.  The individualindividual to provide the assigned case trustee with a copy of the tax return or transcript from the most recent year.  Equally, any entity might file for Chapter 7, Chapter 11, or Chapter 13 Bankruptcy as long as they has not willingly appeared before court in the creditor's earlier attempt at settling, or voluntarily dismissing a court case linking to the debt within in the last one-hundred and eighty days (180 days) previous to filing for any type of Bankruptcy.

Chapter 7 Bankruptcy, one of the three major chapters, is one commonly used by individuals who have fallen into debt.  It is technically named Liquidation under the Bankruptcy Code, which means that if the consumer was to file under this chapter, their nonexempt homes and land would be sold and the money of this would go to repay the debt.  Any entity may file for Chapter 7 as long as they have not dismissed voluntarily or refused to appear in court for a earlier attempt by the creditor to settle the debt in some manner within the last one-hundred and eighty days (180 days) before filing.  The debtor must also meet with an accepted credit counselor one-hundred and eighty days (180 days) ahead of filing. This chapter provides a possibility to repay back creditors by selling nonexempt assets in order to settle the overdue fees.  The major consequence of filing under Chapter 7 Bankruptcy is the loss of property.  The court would charge a case filing fee which amounts to a little over $300 due to federal regulations. In order to file the petition itself the debtor would be required to turn over a record of all creditors and the amount and nature of their claims, the source, amount, and frequency of the debtor's income, a list of all of the debtor's property, and a detailed list of the debtor's monthly living expenses.  These would include food, clothing, shelter, utilities, taxes, transportation, medicine, and so on. There are several alternatives to this chapter; namely chapters 11 and 13.

Chapter 9 Bankruptcy is also known as Municipality Bankruptcy and can only be filed by municipalities which include cities and towns, villages, counties, taxing districts, municipal utilities, and school districts.  Basically, Chapter 9 is for any poorly managed local or city government and is not used by consumers.

Chapter 11 Bankruptcy is a term that is now fairly regurlarly used as it is what many companies in late 2008 and early 2009 filed under.  It is the Reorganization Under the Bankruptcy Code and allows a company or partnership to reorganize in order to keep their establishment alive and pay back creditors over time.  However, it is also used by individual consumers and is filed much the same way that Chapter 7 would be.  Likewise, an individual who has willingly failed to appear before court or comply with the orders of the court or voluntarily dismissed after creditors sought relief from the bankruptcy court within the last one-hundred and eighty days (180 days) before filing are not eligible to file for any chapter of bankruptcy.  The debtor has 120 days, except they are a small business debtor, to file a plan. In North Carolina and Alabama, bankruptcy administrators operate comparable functions that U.S. Trusties execute in the other forty-eight (48) states.

Chapter 12 Bankruptcy is liable for providing adjustments to the debts of persons who are classed as a “family farmer” or a “family fisherman”, which is why it is named Family Farmer or Family Fisherman Bankruptcy.  Family farmer or family fishermen refers to an individual or an individual and spouse or a corporation or partnership. In reference to corporations or partnerships, they must be owned solely or mostly by a single family unit.  Additionally, in reference to the individual or individual and a spouse, they must be engaged in a farming or commercial fishing business.  The entire debts, both secured and unsecured, have to not exceed $3,544,525 if a farming operation and $1,642,500 if a commercial fishing operation.  Fifty percent (50%) of a family farmer's debt must be linked to the farming operation whereas eighty percent (80%) of a family fisherman's total debts must be linked to the commercial fishing operation.  Finally, more than fifty percent (50%) of the family's revenue from the past year have to come from either a farming or commercial fishing operation.  A person who files for Chapter 12 Bankruptcy may adhere to the guidelines laid out for those who would file for Chapter 7, Chapter 11, or Chapter 13 Bankruptcy.  Filing for Chapter 12 Bankruptcy consequentially stops the majority collection proceedings against the debtor or the debtor's property.  Chapter 12 Bankruptcy allows the debtor to pay back the creditors in small amounts which requires the debtor to live on a fixed budget for a set period of time and the debtor can't get any new debt within the time period as it may well make it arduous to reimburse back the creditors.

Chapter 13 Bankruptcy allows the debtor to pay back their debts over a particular period of time, typically three to five years, without the selling of their properties.  It is formally called the Individual Debt Adjustment but is also called a wage earner's plan.  It allows persons with a regular income to develop a arrangement to repay all or part of their debts over a certain time period.  Chapter 13 offers the individual a opportunity to save their residence from liquidation, which would most probably happen if they were to file for Chapter 7 bankruptcy.  It also allows an individual to reschedule secured debts, though this excludes a mortgage for their primary residence, and lengthen the debt over the life of the chapter 13 plan.  This may help to reduce payments.  The debtor would have no direct contact with the creditors under chapter 13 bankruptcy as they pay the agreed amount to the trustee who then pays it to the creditors.  Any person is eligible for chapter 13 relief if thiertheir unsecured debts are fewer than $336,900 and their secured debts are fewer than $1,010,650.  Unlike earlier Chapters, corporations and partnerships can't file under Chapter 13.  The same steps that are addressed in the third paragraph are taken to file for Chapter 13 Bankruptcy though the fee is slightly less than $300. Chapter 13 contains a special provision to look after co-debtors.

Chapter 15 Bankruptcy refers only to those cases that cross the United States Borders.  It is also known as the Ancillary and Other Cross-Border Cases Chapter.  Obviously, this Chapter deals with cases that have to do with more than one nation.  Alternately, the debtor may file a Chapter 7 or Chapter 11 Bankruptcy case within the United States.  An ancillary case is used when a “foreign representative” files a petition for the recognition of a “foreign proceeding”.  If the bankruptcy case is initiated by a foreign representative the court's jurisdiction is typically limited to the debtor's assets that are situated in the United States.

Please be informed that if one should wish to file Bankruptcy, they ought to be sure to contact a lawyer in reference to their individual case and for extra information that pertains specifically to them.  If one does file for Bankruptcy of any type, their credit may or may not be greatly affected.  This means that they may be unable to get a credit card or any line of credit for many years after filing