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Monday, February 16, 2009
The United States Trustee was established by Congress to handle many of the supervisory and administrative duties of bankruptcy proceedings. Proceedings in bankruptcy courts are governed by the Bankruptcy Rules which were promulgated by the Supreme Court under the authority of Congress.
There are two basic types of Bankruptcy proceedings. A filing under Chapter 7 is called liquidation. It is the most common type of bankruptcy proceeding. Liquidation involves the appointment of a trustee who collects the non-exempt property of the debtor, sells it and distributes the proceeds to the creditors. Bankruptcy proceedings under Chapters 11, 12, and 13 involve the rehabilitation of the debtor to allow him or her to use future earnings to pay off creditors.
A number of sections of Chapter 11 incorporate the debtor-creditor law of the individual states. Congress passed the Bankruptcy Code under its Constitutional grant of authority to "establish... uniform laws on the subject of Bankruptcy throughout the United States." See U.S. Constitution Article 1, Section 8. States may not regulate bankruptcy though they may pass laws that govern other aspects of the debtor-creditor relationship.
Bankruptcy has been a growing trend throughout the country over the last decade. Chances are, you know several people that have had to file for bankruptcy. Remember, it's designed for one thing -- to help people when they need help. There's nothing wrong with asking for help.
Bankruptcy attorneys should explain the applications of the new bankruptcy laws. The attorney should explain how they function to relieve individuals and businesses from indebtedness and provide a new financial start. You need to know how the bankruptcy code regulates the bankruptcy proceedings. The attorney will help you understand which chapter you may file under, what bills can be eliminated, how long payments may be extended, what possessions can be kept, and all other details regarding the bankruptcy case
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Bankruptcy proceedings are supervised by and litigated in the United States Bankruptcy Courts. These courts are a part of the District Courts of The United States. The United States Trustee were established by Congress to handle many of the supervisory and administrative duties of bankruptcy proceedings. Proceedings in bankruptcy courts are governed by the Bankruptcy Rules which were promulgated by the Supreme Court under the authority of Congress.
There are two basic types of Bankruptcy proceedings. A filing under Chapter 7 is called liquidation. It is the most common type of bankruptcy proceeding. Liquidation involves the appointment of a trustee who collects the non-exempt property of the debtor, sells it and distributes the proceeds to the creditors. Bankruptcy proceedings under Chapters 11, 12, and 13 involve the rehabilitation of the debtor to allow him or her to use future earnings to pay off creditors.
A trustee is appointed to supervise the assets of the debtor under Chapter 7, 12, 13, and some 11 proceedings. A bankruptcy proceeding can either be entered into voluntarily by a debtor or initiated by creditors. After a bankruptcy proceeding is filed, creditors, for the most part, may not seek to collect their debts outside of the proceeding. The debtor is not allowed to transfer property that has been declared part of the estate subject to proceedings. Furthermore, certain pre-proceeding transfers of property, secured interests, and liens may be delayed or invalidated. Various provisions of the Bankruptcy Code also establish the priority of creditors' interests.
Bankruptcy has been a growing trend throughout the country over the last decade. Chances are, you know several people that have had to file for bankruptcy. Remember, it's designed for one thing -- to help people when they need help. There's nothing wrong with asking for help.
Bankruptcy attorneys should explain the applications of the new bankruptcy laws. The attorney should explain how they function to relieve individuals and businesses from indebtedness and provide a new financial start. You need to know how the bankruptcy code regulates the bankruptcy proceedings. The attorney will help you understand which chapter you may file under, what bills can be eliminated, how long payments may be extended, what possessions can be kept, and all other details regarding the bankruptcy case
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Chapter 7 bankruptcy provides an "order of relief" that triggers an "automatic stay" thus all creditors and collectors are prohibited from pursuing you or your property outside of the bankruptcy proceeding. This is especially important if you've received a foreclosure notice.
You are permitted to retain certain "exempt property" but all remaining assets are liquidated (sold) by the bankruptcy court Trustee. You should also understand that if you file a chapter 7 bankruptcy you could loose some or all or your property! This may be an advantage or disadvantage depending on how much equity you have in the asset.
With the petition, the debtor will file: schedules of assets and liabilities, current income and expenditures, executory contracts and unexpired leases, and also, a schedule of exempt assets. Bankruptcy forms can be purchased at a stationery store, or an attorney can help you prepare the forms. Generally back taxes less than three years old, student loans, alimony, and child support are included in statutory exceptions of non-dischargeable debts. When a troubled business is badly in debt and unable to service that debt or pay its creditors, it may file (or be forced by its creditors to file) for bankruptcy in a federal court under Chapter 7. A Chapter 7 filing means that the business ceases operations unless continued by the Chapter 7 Trustee. A Chapter 7 Trustee is appointed almost immediately. The Trustee generally sells all the assets and distributes the proceeds to the creditors.
Statutory exceptions of non- dischargeable debt generally includes back taxes less than three years old, student loans, alimony, and child support. Often these debts will be liquidated with the use of a CRO. This is a court appointed officer who is required to auction the properties of the concerned company. In the case of L.I.D. for example, the CRO was Consensus Advisors LLC. They performed an initial due diligence to find a suitable "stalking horse bidder." The stalking horse bidder was then required to provide a guarantee that at some minimum "reserve" price they would purchase all or part of the inventory.
Chapter 7 of bankruptcy laws provides an "order of relief" that triggers an "automatic stay" thus all creditors and collectors are prohibited from pursuing you or your property outside of the bankruptcy proceeding is provided by chapter 7 of bankruptcy laws.
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