Bankruptcy is a legal process that helps people who can no longer pay their creditors to start from scratch. It can be done by liquidating assets to pay off debts or creating a repayment plan. Bankruptcy laws also protect companies with financial problems. This article explains the bankruptcy process and the laws, and provides information on where to file for bankruptcy. Filing for bankruptcy can help a person eliminate debt or make a plan to repay debts.
A bankruptcy case usually begins when the debtor files a petition with the bankruptcy court. The petition can be filed by an individual, by spouses together, or by a corporation or other entity. All bankruptcy cases are prosecuted in federal courts under the rules described in the U. S.
Code. There are different types of bankruptcies, which are usually referred to by their chapter in the U. Code. Bankruptcy Basics provides detailed information on filing applications. It is highly recommended to seek the advice of a qualified lawyer because bankruptcy has long-term financial and legal consequences.
People can file for bankruptcy without a lawyer, which is called a pro se filing. Use the forms that are numbered in the 100 series to file bankruptcy for individuals or married couples. Use the forms numbered in the 200 series if you are preparing for bankruptcy on behalf of someone other than a person, such as a limited company, partnership, or limited liability company (LLC). Sole proprietors should use forms that are numbered in the 100 series. If you need help finding a lawyer who specializes in bankruptcy, the following resources can help.
If you can't afford an attorney, you may qualify for free legal services. This site is maintained by the U. Administrative Office of the Courts on behalf of the federal judiciary. The purpose of this site is to provide information from and about the U. Judiciary.
The general idea is that the court wants the bankruptcy administrator, the person selected to administer their case, to be able to examine and, if necessary, sell their assets in a Chapter 7 case without incurring unnecessary expenses. For more information, see your state's bankruptcy information. However, some districts cover large areas, so the bankruptcy court may not be as close to your home as you would like. Most large districts have multiple locations, some of which accept bankruptcy filings, but not all. You can call your bankruptcy court or visit the court's website by following the instructions above under How to Find the Bankruptcy Court, to find a closer satellite location. If you moved within the last 180 days, the right place to file your bankruptcy case is where you lived for most of the 180 days.
For example, if you lived in California for the past few years but moved to Arizona two months ago, California is still the right place to file for bankruptcy because that's where you lived for 120 days of the 180-day period before you filed your application. The main document, the cover as it were, is called a petition. In the petition, the debtor includes preliminary information such as name, address and type of bankruptcy chapter that they filed. The debtor must submit a number of other documents along with the petition. Most financial information appears on bankruptcy lists. You will also need to prepare other forms as well as a certificate of completion of credit counseling.
On the financial statement form for people who file for bankruptcy, you will disclose your earnings and previous real estate transactions. The statement of intent form for people who file a statement of intent under Chapter 7 tells the court (and your creditors) what you intend to do with items you are leasing (such as equipment) or with property that guarantees a loan. For details on different types of paperwork needed read How to Complete Bankruptcy Forms. Although most people file their files close to home, you may have other options. Here are a few more rules you can use to determine your filing location: If you have been temporarily absent from your home for 180-day period, then location of bankruptcy court near your home may still be right place to file for bankruptcy. The law allows you to file your bankruptcy petition in district where most of your assets are located.
However it can be complicated as it could affect exemptions you are entitled to apply for (learn why bankruptcy exemptions are important), so it's best to get legal advice from a bankruptcy lawyer before applying. The bankruptcy court won't refuse to accept your documents if you file application in wrong place but trustee may bring matter before judge. If court determines that current location will cause creditors to be unfairly harmed or harmed or if trustee could better manage case in another jurisdiction then court has option of dismissing or transferring case. There is only one place where bankruptcy cases can be heard and that is federal courts. The general trial court where most cases take place is called district court. District courts deal with cases within their jurisdiction under federal court system including bankruptcies cases. Having specialized courts to hear bankruptcies cases is essential because many complexities and details involved in bankruptcies process.
For example a bankruptcy judge would have decide which chapter should be filed participate how each claim is handled and what.
