The bankruptcy code is managed and ruled on by the US bankruptcy court. Congress has the power (from the US Constitution) to legislate on bankruptcy in a fair and uniform way and did so in the late 1970s.
The Bankruptcy Code was created by Congress, which governs bankruptcy in the US. There have been slight changes and amendments issued to the Bankruptcy Code since it was first created. The last changes were made in fall of 2007.
The US bankruptcy court is like any other part of the government in that it has to follow the laws and codes passed by Congress. There are specific bankruptcy rules for all types of bankruptcy from personal to corporate. The rules can seem confusing to an average person because they are so specific and there are rules for everything involved with bankruptcy.
Types of bankruptcy
There are six types of bankruptcy, each called a different chapter, and they all have their own rules that apply to them. It is always a good idea to have an attorney when you are dealing with the US bankruptcy court so you get the best results and you do not give up any of your rights.
The average person who files Chapter 7 or 13 bankruptcy will not have to go to United States bankruptcy courts. The United States bankruptcy court only hears the most complex and unique cases so it does not get overwhelmed.
The rest of the cases are dealt with by a trustee of the court. In most circumstances, you and your attorney will work with the trustee exclusively and never meet the judge in charge of your local US bankruptcy court.Even Chapter 11 and 12 bankruptcy cases are dealt with by trustees.
How a US bankruptcy court works
When you file for bankruptcy, your creditors can come forward and voice their objection to your debt being discharged. If you are facing a foreclosure process, you should know that people who go through Chapter 7 bankruptcy often have their mortgage company show up to do just this. The other creditors rarely show up to voice their objection to the debt being discharged, though.
People in business who file bankruptcy may end up in US bankruptcy court to face their creditors who want to set up a specific repayment plan. A bankruptcy court judge will decide which type of bankruptcy you can file, Chapter 7 or Chapter 13, for personal bankruptcy.
You can dispute the judge’s determination about your bankruptcy type if you wish by showing the judge why you should be allowed to file Chapter 7 instead of Chapter 13.
The majority of personal bankruptcy cases are pretty easy and tend to go smoothly. The United States bankruptcy court exists to help people start over and get past their financial mistakes in the past but the court can rule as it chooses on all bankruptcy issues.
Bankruptcy is usually a last resort for people and companies but it can be an effective way for people to deal with their debt if it goes out of control. The creation of the US bankruptcy court gives US citizens a chance to get out of debt and regain control of their finances.