David's Bankruptcy Blog

Chapter 15 bankruptcy may be considered by some as the most unique bankruptcy chapter. This is because it is a way for foreign representatives to gain access to a U.S. Bankruptcy Court. Usually, a foreign company or individual will have a bankruptcy proceeding pending in a foreign court, however, there are assets in the United States that need to be dealt with. So, the foreign company can file a Chapter 15 petition. The proceeding in the United States is secondary to the foreign proceeding.

Read more about Chapter 15 bankruptcy.

Chapter 12 bankruptcy is specifically designed for family farmers and fishermen. So, this Chapter has been designed to accommodate the unique financial situations in which family farmers and fishermen find themselves. The process is fairly similar to Chapter 13 bankruptcy.

Read more about Chapter 12 bankruptcy.

Chapter 9 bankruptcy is for "municipalities," which refers to cities, towns, taxing authorities, municipal utilities, and other governmental entities. This type of bankruptcy is usually very contentious, complex, political, and expensive. Right now, the city of Stockton in California is contemplating Chapter 9 bankruptcy. It may be the case that due to the economy, more and more municipalities will be filing for Chapter 9 in the future.

Read more about Chapter 9 bankruptcy here.

Bankruptcy in the United States has a very long and perhaps "tortured history. The federal bankruptcy laws were enacted and repealed multiple times since late 18th century, all the while, many individual states had been operating their own bankruptcy systems. Did you know that these systems sometimes provided for imprisonment of debtors?

Read more about the history of bankruptcy in the United States.

The goal of bankruptcy is the discharge, which essentially wipes out your personal liability as to certain (and usually most) debts. However, if you lied on your bankruptcy petition or did other acts that are against the federal bankruptcy laws, you can be denied a discharge. This can even result in a criminal referral.

Denial of a bankruptcy discharge will not occur unless you are sued in bankruptcy court. Read more about this process here.

As discussed in my previous blog post, in order to file for bankruptcy, you must provide the court a basic filing fee. In certain cases, you can even waive the bankruptcy filing fee. This entails completing an application and filing it with the court. The bankruptcy judge will then decide whether the fee will be waived.

The judge, however, cannot waive your filing fee if your income is greater than 150% of the federal poverty line. Therefore, please be aware that the waiver of the filing fee is only for those who have very low income. Read more about how to apply for this waiver.

Although bankruptcy is a powerful remedy for anyone that qualifies to use it, it is not without its costs. For example, as of 2012, the filing fee for Chapter 7 bankruptcy is $306. This may present a barrier for some individuals who cannot afford to make such a large lump sum payment.

For this very reason, bankruptcy courts permit you to submit an application certifying that you cannot make a lump sum payment and requesting installment payments. You can request a maximum of four payments. Read more about how to apply to pay your filing fee over time.

Prior to filing for bankruptcy, many people are worried: "what will people think? What will my co-workers say?" In addition to these concerns, people worry about how a bankruptcy will affect their ability to get credit in the future. These worries are certainly not uncommon nor are they silly, they are part of being human. I probably would worry if you didn't worry about these things! However, it is important to think about these possibilities in a constructive and logical way.

Read about the stigmas of bankruptcy. Maybe it can help you obtain a better perspective of the situation.

I often get questions by a variety of individuals about "which bankruptcy laws apply in my state." I believe that this may be a large point of confusion for a lot of people. Let me clarify! The bankruptcy system is a purely federal system. This means that bankruptcy was created by Congress and is therefore evenly applied across all the states. The bankruptcy laws in California are the same as the bankruptcy laws in Florida. This is because bankruptcy is based on federal laws. You can think of it like federal criminal laws. A federal crime committed in one state would be the same in any other.

I believe that one reason people may be confused about the source and applicability of bankruptcy laws is exemptions. When you file for bankruptcy, you get to claim certain property as exempt, meaning you can keep it. Although there is a system of federal exemptions, all of the individual states have created their own exemptions, which may be more beneficial than the federal system. As a result, you may use state exemptions in the context of a bankruptcy. Read more about the California exemption system as an example.

Are you puzzled by the foreclosure process? Are the terms judicial foreclosure and non-judicial foreclosure foreign words to you? If so, you should read more about the foreclosure process, given its prevalence in today's economic climate.

Foreclosures also interact with the bankruptcy process in very specific ways. As a result, a better understanding of foreclosures will take you on the path to better understanding your rights in and outside of bankruptcy court as it relates to foreclosures.