Bankruptcy Law and Bankruptcy Procedure

Bankruptcy Law and Bankruptcy Procedure

Criminal Law and Bankruptcy Code govern the bankruptcy procedure in the United States. Both documents state that the debtor is responsible for deceiving the creditor, therefore, he may lose all his property. And if the deception is proving, then a more serious punishment may be incurred – imprisonment.

Bankrupt in the USA

In the United States, a bankrupt is an individual who is recognized as such by a special court dealing with such cases. The fact of bankruptcy can be recognizing and establishing in case of legal insolvency. After that, the property of the borrower is sold and the proceeds are paid off the debts.

Of course, in 99.9% of cases, the proceeds are not enough to pay off the entire loan, so the lender almost always remains at a loss. If a bankrupt tried to hide his property from a court representative or the fact that he wants to become a fictitious bankrupt is revealed, this is a guarantee that this person will be put on trial, since the country’s Criminal Code has been violated.

Bankruptcy Procedure

To conduct bankruptcy procedures for individuals in the United States, the US Department of Justice has created the Executive Bureau. This agency is committed to appointing federal governors for each case.

It can be either one person or a group, the selection depends on the specifics of the case and its complexity. It is the responsible manager from the Executive Bureau who manages the entire process of the bankruptcy procedure. The insolvency lawsuit is hearing by the local bankruptcy court.

Features of decision-making by an individual

A person deciding to declare himself bankrupt must:

  1. Consider your options. The decision to declare bankruptcy can be a last resort. If there is a way to repay the debt, it is best to do so. To do this, you can contact your creditors and agree with them about the possibility of repaying your debt by any means. If there are any assets, they can be sell, if this option is not more unprofitable than a loan.
  2. Analyze your debt. Some payments cannot be written off even for a bankrupt person. To do this, you need to break down the debts by category and find out which of them cannot be written off. If those account for more than half of the debt, then bankruptcy will not solve the problem.
  3. Find out whether existing assets are subject to seizure in the event of bankruptcy. Some are protecting by state law. For example, these can be cars costing less than five thousand dollars. Accordingly, if a car costs, for example, $19,000, it will be seized, but if 4,999 is not.

In addition, in some states, a bankrupt can keep any value (the amount is set by the state court). Protects the law and other assets: home, wedding rings, car. If there are expensive assets among the assets, the representative of the Executive Bureau will allow the rest to be left. But only in case, if the expensive items will be sell to reduce the debt to creditors.

According to bankruptcy laws in the United States, it is impossible to pay off arrears on the following payments in this way:

  • Alimony
  • Debts that appearing after the person declaring bankrupt
  • Secured loans
  • Debt arising from the treatment of drunk-driving injuries
  • Student loans
  • Debts arising from malicious acts aimed at causing damage to people or their property
  • Child support
  • Debts acquired in the last six months before the person was declaring bankrupt
  • Certain types of taxes
  • Debt fraudulently acquired

An important detail: for guarantors, the debt is not canceling when an individual is declaring bankruptcy. Accordingly, they will have to pay all the debts they vouched for.

Reorganizing the debts smartly

Several clients have leases and debts that are not working out for them anymore.

If you looking for a bankruptcy lawyer and live in Tampa, FL area, you can get in touch with the experienced lawyers from Weller Legal Group. This firm has helped several small businesses and family businesses in Tampa, FL area with small business bankruptcies. Call now for scheduling your initial consultation.

Picture Credit: Pexels