Federal Bankruptcy Explained
Author: Legal Helpers

In the United States, federal bankruptcy was designed by
congress as a relief measure to persons or organizations who are
financially distressed. In other words, in the face of
insolvency, an individual or organization can find relief
against their debt obligations in federal bankruptcy.

Chapter 7 of the federal bankruptcy code provides for the
appointment of a trustee for the liquidation of assets of the
debtor for orderly distribution to the creditors. When a
debtor's assets are being liquidated, federal bankruptcy code
requires that this should be subject to certain exemptions.

Federal bankruptcy exemptions determine how much property a
debtor can keep when they file for Chapter 7 bankruptcy and also
the category of items. One of the schedules in a debtor's
petition under the federal bankruptcy code is the schedule of
exempt property. In essence, Federal bankruptcy law provides
that creditors cannot claim certain properties of a debtor.

In the same manner, the debtor cannot be discharged of some
debts. In some states, state exemptions are different from
federal exemptions (in the United States). Although each state
is permitted by law to adopt its own exemption law, certain
states allow Federal bankruptcy exemptions and so a debtor may
choose to abide by the federal list of exemptions or by that of
their home state. But overall, the state decides which exemption
is upheld in a bankruptcy court within that jurisdiction. This
underscores congress goal to offer protection to financially
distressed individuals or organizations. Married couples may
double all exemptions under federal bankruptcy code.

Bankruptcy is something that could happen to anyone. Even big
organizations do lose their shirts. Since bankruptcy is
something that could actually happen to anybody, our laws
provide safety nets for people, municipalities and business
entities that have financial difficulties. Chapter 12 Bankruptcy
deals with family farmer or fisher folks, Chapter 11 Bankruptcy
deals with business reorganization, Chapter 9 talks about
municipalities while Chapter 15 focus on ancillary and
cross-border cases. Although there are many types of bankruptcy,
only two of these types of bankruptcies actually concerns
individuals like you. Chapter 7 and Chapter 13 Bankruptcy tell
you how you van dissolve you piles of debts.

According to a study in 2007, on the rate of federal bankruptcy
and state bankruptcy, businesses are embracing proceedings under
state laws rather than federal bankruptcy laws because
proceedings under the former is faster, less expensive and more
private.

In view of this, the debtor should endeavor to compare Federal
bankruptcy exemptions with their states exemptions using the
guidance of a solicitor when filling their bankruptcy forms.

Filing Fees For Bankruptcy

Filing for bankruptcy entails some expenses. Just because you
are broke that does not mean that you are exempt from court
filing fees. However, the good news is that filing fees for
individuals are very much lower compared to those filing fees
imposed on businesses. For instance, where businesses filing
under Chapter 11 Bankruptcy are required to filing fee in the
amount of $ 1,039, individuals who are filing bankruptcy under
Chapter are only required to pay $299 while those who are filing
under Chapter 13 gets to pay $274. Family farmers and fisher
folks also get to pay lower fees compared to big companies.
Under Chapter 12 Bankruptcy these people are only required to
pay $239. Sounds complicated? Not really. If you have experts to
guide you through bankruptcy filing and the proceedings that
will follow thereafter, you will get through the whole thing
without a snag.

No matter the route you choose, guidance and information is
very essential. Bear in mind that bankruptcy is not a panacea to
financial indiscretion but an opportunity to start afresh and
making use of the lessons learnt pre-bankruptcy.


About The Author: Legal Helpers is a debt relief agency helping
people to file for bankruptcy relief under the bankruptcy code.
We're one of the largest consumer bankruptcy firms. Bankruptcy
attorneys answer the phones six days a week and evenings.
http://www.legalhelpers.com