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Law allows a debtor to resolve his debts by dividing his assets among his creditors. Federal bankruptcy court enables a debtor to stay in business and generate revenue to resolve his debts. The law also allows debtors to free themselves of their financial obligations after their assets are distributed, even if their debts haven’t been fully paid. A record 1,660,245 bankruptcies were filed in United States Bankruptcy court in 2003.
Federal court has exclusive jurisdiction over bankruptcy law listed in Title 11 of the United States Code. These cases must be filed in U.S. court. These U.S. bankruptcy courts are part of the District Courts of The United States. Congress passed the codes to establish uniform Bankruptcy law throughout America. States may not regulate bankruptcy law but may pass laws covering other areas of debtor-creditor relationships.
A U.S. bankruptcy judge is a judicial officer of the U.S. district court appointed to exercise jurisdiction over bankruptcy law matters. Congress determines the number of judges who are appointed for 14-year terms.
There are two basic types of bankruptcies filed in a U.S. court. A Chapter 7 filing is called liquidation. It is the most common proceeding, with 1,176,905 filed in U.S. bankruptcy court in 2003. In Chapter 7, a trustee collects the non-exempt property of the debtor, sells it, and distributes proceeds to creditors. When a Chapter 11, 12, or 13 is filed in United States Bankruptcy court, the debtor may use future earnings to pay creditors.
Under the law, either a debtor or creditor can initiate the proceedings in court. Under the law, the process commences with the filing of a petition in Federal bankruptcy court. A debtor must file a statement of assets and liabilities, and schedules listing creditors. If you file without an attorney, you can purchase the required forms at most stationary stores. There is a range of fees to file in Federal Bankruptcy court, depending on the law under which you file. For example, if filing a Chapter 7 in U.S. bankruptcy court, you must pay a fee of $200 to file, which includes a $155 filing fee, $30 miscellaneous fee, and $15 trustee fee.
This law dictates that creditors cannot collect debts outside the proceeding. The law also states that the debtor is not allowed to transfer property that’s been declared part of the estate subject to proceedings. Some transfers of property, secured interests, and liens taking place before filing a petition in court could be delayed or invalidated to prevent fraud.
While filing can relieve you of your debt, it will damage your credit. A filing stays on your credit up to 10 years and makes it difficult and costly to secure loans, refinance a home, or purchase a car. To avoid filing bankruptcy, a qualified debt reduction company can help reduce your debts to a manageable level so you don't have to stand in bankruptcy court. Click here for a free consultation from Knockout Debt.
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