The federal bankruptcy system is grounded on the grant of power contained in the United States Constitution. This gave Congress the power to create “uniform laws on the subject of bankruptcies.”
In 1978, Congress passed the Bankruptcy Reform Act of 1978, which has become known as the “Bankruptcy Code” or “Code”. There have been several amendments to the Code, the most significant being the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Also known as “BAPCPA”.
The Bankruptcy Code is Title 11 of the United States Code. It is divided into Chapters and contain general rules applicable to each chapter proceeding. Chapter 7 is a straight bankruptcy liquidation and Chapter 13 is a consumer reorganization.
In a Chapter 7 Bankruptcy, the individual turns over all of his or her non-exempt assets to the Chapter 7 case Trustee. The case Trustee liquidates the assets (turns the assets into money, usually by selling them), and uses the proceeds of the liquidation, to pay claims. The claim are paid in an order of priority: expenses of liquidation, and administration, priority claims, and unsecured claims. Afterwards, the individual filer receives a discharge of their debts.
When filing a Bankruptcy you are required to make extensive financial disclosures as part of the bankruptcy process. The individual must send the trustee a copy of their most recent federal tax return before their official meeting of creditors. The Court will send notice of the bankruptcy filing to all creditors listed in the petition. The notice contains the date for the official meeting of creditors, deadline for objecting to the discharge, and the deadline for filing a claim.
Call now for a free strategy session With a MN Bankruptcy Lawyer at Kain & Scott
The Bankruptcy Code requires individual filers to make extensive financial disclosures. An individual filer needs to be willing to make these disclosures and follow the applicable rules of the Bankruptcy Code. Contact the attorneys at Kain and Scott and see us at www.kainscott.com. You will be glad you did!
A word from Minnesota Bankruptcy Lawyer, Wesley Scott
